Chicora Life Ctr. v. Fetter Health Care Network, Inc.

• Decision Date: 14 September 2022
• Docket Number: 2022-UP-354
• Parties: Chicora Life Center, LLC, Appellant, v. Fetter Health Care Network, Inc.; NBSC Corporation; and John and Jane Does 1-100, Defendants, Of which Fetter Health Care Network Inc. is the Respondent. Appellate Case No. 2019-001322
• Court: South Carolina Court of Appeals

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Chicora Life Center, LLC, Appellant, v. Fetter Health Care Network, Inc.; NBSC Corporation; and John and Jane Does 1-100, Defendants, Of which Fetter Health Care Network Inc. is the Respondent.

Appellate Case No. 2019-001322

No. 2022-UP-354

Court of Appeals of South Carolina

September 14, 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.

Submitted June 1, 2022

Appeal From Charleston County Wade H. Logan, III, Special Referee

John A. Massalon, of Wills Massalon &Allen LLC, of Charleston for Appellant.

Samuel H. Altman, of Derfner &Altman, LLC, Kevin Roger Eberle of Charleston School of Law, and Armand G. Derfner, all of Charleston, for Respondent.

PER CURIAM:

This appeal arises from a failed lease transaction between Chicora Life Center, LC (Chicora), the landlord, and Fetter Health Care Network Inc. (Fetter), the tenant, for rental of a portion of a former naval hospital in North Charleston (the Premises). Chicora sued Fetter after Fetter refused to move into the Premises and pay for certain tenant improvements (the Tenant Improvements); Fetter counterclaimed alleging its obligations under the lease were excused because Chicora failed to satisfactorily complete the Tenant Improvements. A trial was held before a Special Referee, who agreed with Fetter, ruling because Chicora did not make the Tenant Improvements as it promised in the lease, Fetter had no duty to perform. Chicora now appeals. We affirm.

I. Standard of Review

Because breach of a lease is an action at law, our scope of review of the Special Referee's factual findings is narrow: we must affirm them if they are supported by any evidence in the record. Roberts v. Gaskins, 327 S.C. 478, 483, 486 S.E.2d 771, 773 (Ct. App. 1997) ("In an action at law, the appellate court will correct any error of law, but it must affirm the special referee's factual findings unless there is no evidence that reasonably supports those findings."); Middleton v. Eubank, 388 S.C. 8, 14, 694 S.E.2d 31, 34 (Ct. App. 2010) ("A lease agreement is a contract, and an action to construe a contract is an action at law."). Our scope widens fully when reviewing the Special Referee's rulings interpreting a contract, as that presents a question of law that we assess de novo. Town of Summerville v. City of N. Charleston, 378 S.C. 107, 110, 662 S.E.2d 40, 41 (2008) (providing appellate courts "review[] questions of law de novo"); M &M Group, Inc. v. Holmes, 379 S.C. 468, 477, 666 S.E.2d 262, 266 (Ct. App. 2008) ("When a contract is clear and unambiguous, the construction of the contract is a question of law for the court." (quoting Moser v. Gosnell, 334 S.C. 425, 430, 513 S.E.2d 123, 125 (Ct. App. 1999))).

II. Law/Analysis

Fetter, a national health care provider, wanted to lease the Premises for use as a medical clinic. Fetter and Chicora entered a lease agreement in 2014 and later executed several addenda. Section 2 of the lease provided Fetter was to "receive delivery of the Premises after satisfactory completion of the Tenant Improvements by Landlord. All Tenant Improvements contemplated prior to Tenant's occupancy are to be done by and at the expense of the Landlord as described in Exhibit B and subject to the Budget Cap." Exhibit B stated in relevant part that the Tenant Improvements shall be made "in accordance with applicable building codes and craftsmanship standards to the satisfaction of Tenant, Landlord, and City of North Charleston such that a Certificate of Occupancy will be issued ...." The addenda to the lease changed the parties' duties as to the Tenant Improvements, placing the duty on Chicora to finance and complete the Tenant Improvements and only requiring Fetter to timely pay Chicora back for the costs of the improvements that exceeded the budget cap. The lease and addenda declare at least seven times that Fetter's obligation to occupy the Premises would arise only when the Tenant Improvements were completed and a certificate of occupancy had been issued. The parties agreed in section 4 that the lease term would not even begin until both of these conditions had been met.

In early 2016, Chicora received a certificate of occupancy and tendered the Premises to Fetter. Fetter executives inspected the Premises and found what they described as "a wreck," "a mess," "a disaster," and "Friday the 13^th," stating things were "completely unfinished" and noting there were broken walls, unfinished ceilings, broken floors, missing doors, locks not on doors, missing sinks, missing toilets, leaks from the plumbing into exam rooms, a mildew smell, and inoperable elevators. Believing Chicora had not met its contractual obligation to satisfactorily complete the Tenant Improvements, Fetter refused to move in or pay for the improvements. Chicora then brought this action.

The Special Referee did not err in finding the lease required Chicora to complete the Tenant Improvements and obtain of a certificate of occupancy before delivering the Premises to Fetter, triggering the lease term commencement and Fetter's obligation to pay rent. This term was plainly and repeatedly stated in the lease and addenda, and we must enforce it. See S.C. Dep't of Transp. v. M &T Enters. of Mt. Pleasant, LLC, 379 S.C. 645, 655, 667 S.E.2d 7, 13 (Ct. App. 2008) ("When a contract is unambiguous, clear, and explicit, it must be construed according to the terms the parties have used, to be taken and understood in their plain, ordinary, and popular sense."); id. ("Where an agreement is clear and capable of legal construction, the court's only function is to interpret its lawful meaning and the intention of the parties as found within the agreement and give effect to it."). Likewise, the lease unambiguously provided that, if Chicora did not complete its obligations as to the Tenant Improvements, Fetter had no obligation to move in or pay for the Tenant Improvements.

If the Tenant Improvements would automatically be considered complete when a certificate of occupancy was issued, then the parties would have had no need to list both the completion of the Tenant Improvements and the issuance of a certificate of occupancy as two separate requirements that together triggered the commencement of the lease. See Buice v. WMA Sec., Inc., 380 S.C. 149, 157, 668 S.E.2d 430, 434 (Ct App. 2008) ("[I]n determining the intent of the...