D.R. Horton, Inc. v. Wescott Land Co.

• Decision Date: 09 August 2012
• Docket Number: No. 4998.,4998.
• Citation: 730 S.E.2d 340,398 S.C. 528
• Parties: D.R. HORTON, INC., Plaintiff, v. WESCOTT LAND COMPANY, LLC, Defendant, Thomas R. Hawkins and Wescott Land Company, LLC, Appellants, v. D.R. Horton, Inc., Respondent.
• Court: South Carolina Court of Appeals

398 S.C. 528

730 S.E.2d 340

D.R. HORTON, INC., Plaintiff,

v.WESCOTT LAND COMPANY, LLC, Defendant,Thomas R. Hawkins and Wescott Land Company, LLC, Appellants,

v.D.R. Horton, Inc., Respondent.

No. 4998.

Court of Appeals of South Carolina.

Heard Dec. 8, 2011.

Decided July 11, 2012.

Rehearing Denied Aug. 9, 2012.

M. Dawes Cooke, Jr., and K. Michael Barfield, of Charleston, for Appellants.

Charles E. Carpenter, Jr., and Carmen Vaughn Ganjehsani, of Columbia, and Neil S. Haldrup, of Charleston, for Respondent.

HUFF, J.

D.R. Horton, Inc. (Horton) brought this action against Wescott Land Company, LLC (Wescott) for breach of contract. Wescott counterclaimed against Horton asserting claims of breach of contract, unfair trade practices, abuse of process, malicious prosecution, breach of contract accompanied by a fraudulent act, tortious interference with prospective economic advantage, and slander of title. Wescott's primary owner, Thomas R. Hawkins (Hawkins), was added as a counterclaimant, asserting the same claims against Horton. With the exception of the claim for breach of contract, the trial court granted Horton summary judgment on all of Wescott's counterclaims, and granted Horton summary judgment on all of Hawkins' counterclaims, including that of breach of contract. On appeal, Wescott and Hawkins (collectively hereinafter referred to as Appellants)assert error in the grant of summary judgment in favor of Horton on the claims for slander of title, unfair trade practices, abuse of process, malicious prosecution, breach of contract accompanied by a fraudulent act, and tortious interference with prospective contractual relations. We affirm.

FACTUAL/PROCEDURAL BACKGROUND

This appeal arises out of a contract for the conveyance of real property. In the early 1980's, Hawkins purchased approximately 400 acres of realty in Dorchester County. Hawkins sold around twenty-six acres of the property to another individual, and thereafter entered into a series of contracts with Horton for the sale of most, if not all, of the remaining acres. Horton purchased all but the last forty-plus acres in “individual chunks” from Hawkins. Thereafter, Hawkins, along with Tim Fraylick and Cliff Rickard, formed Wescott to develop and sell this remaining acreage to Horton.

In November 2004, Horton and Wescott entered into a contract whereby Horton agreed to buy, and Wescott agreed to sell, the property, consisting of 83 single family lots and 110 townhouse lots. The purchase and sale of the property was to be accomplished pursuant to a “Takedown Schedule,” wherein set numbers of lots would be purchased over a period of sixteen quarters, with the single family lots being purchased quarter one through eight, and the townhouse lots to be purchased from quarter seven through sixteen.¹ Under the agreement, Wescott was required to meet certain conditions precedent pertaining to development of the lots and to provide documentation and certification of these conditions precedent prior to closing on the lots. The contract further provided that Horton was not obligated to purchase any lots which had not achieved “Substantial Completion,” and stated “ ‘Substantial Completion’ shall be achieved upon the date [Horton] receives [Wescott's] notice [regarding the meeting of the conditions precedent] accompanied by evidence satisfactory to [Horton], in [Horton's] reasonable discretion that said requirements have been met.” Additionally, the contract stated that if “Substantial Completion” had not been achieved by six months past the estimated date in the “Takedown Schedule” with regard to any lot to be purchased, Horton had the right, in its sole discretion, to either terminate the contract or extend the date for achievement of “Substantial Completion.” Horton could also, in its sole discretion, elect to purchase lots prior to the achievement of “ Substantial Completion,” but Wescott would still be obligated to achieve “ Substantial Completion” and Horton's election to purchase prior to “Substantial Completion” did not constitute a waiver of that obligation.

Subsequently, in July 2005, Wescott and Horton executed an amendment to the November 2004 contract, further specifying the duties and responsibilities of the parties to the development of the property and the time period for the purchase and sale of the property. Pursuant to the amendment, a new takedown schedule provided for the sale of the lots as follows:

a. Phase 3A (45 lots) on or before the later of July 1, 2005 or upon final plat approval and recordation. 45 lots @ $32,000/lot = $1,440,000.00

b. Phase 3D (38 lots) on or before the later of October 1, 2005 or upon final plat approval and recordation. 38 lots @ $32,000/lot = $1,216,000.00

c. Phase 3E–1 (37 lots) on or before the later of January 1, 2006 or upon final plat approval and recordation. 37 lots @ $25,500/lot = $943,500.00

d. Phase 3E–2 (37 lots) on or before the later of April 1, 2006 or upon final plat approval and recordation. 23 lots @ $25,500/lot = $586,500.00 and 14 lots @ $24,500/lot = $343,000.00

e. Phase 3E–3 (36 lots) on or before the later of July 1, 2006 or upon final plat approval and recordation. 36 lots @ $24,500/lot = $882,000.00The amendment further added a stipulation that Wescott agreed to provide the conditions precedent documents and certifications set forth in the parties' contract twenty days prior to the closing date, in order to give Horton sufficient time to verify the documentation, inspect the property, and conduct final examinations to prepare for closing.

Horton closed on the lots in Phase 3A and Phase 3D, which apparently encompassed the 83 single family lots, and those matters are not in issue. However, a dispute arose in regard to the 110 townhouse lots in Phase 3E–1, 3E–2 and 3E–3. On July 19, 2006, Wescott sent Horton a letter in regard to Phase 3E indicating the conditions precedent required by the contract had been completed so that the twenty day period under the contract had begun running, and requesting to schedule a closing for the entire phase as soon as possible. On August 2, 2006, Wescott's attorney, Steven Smith, sent Horton a letter stating the conditions precedent had been satisfied and proof was provided to Horton on July 19, 2006, and therefore requested that closing on the properties take place no later than August 9, 2006. The letter further warned that failure to close by that date would constitute a default under the contract and amendment. On August 10, 2006, Smith again wrote Horton on behalf of Wescott stating that the conditions precedent documents and certification were delivered to Horton on July 19, 2006, a notice of completion was hand delivered to Horton on August 2, 2006 stating all lots must be closed no later than August 9, 2006, and notifying Horton it was in default for failure to close pursuant to the terms of the contract and amendment.

Horton responded to this letter on August 11, 2006 maintaining the conditions precedent to closing were not satisfied as to the townhouse lots until August 9, 2006, that the last of the documentation and certification for those lots was not received until August 10, 2006, and therefore, given the twenty days Horton was allowed under the contract, Horton could not be in default “until August 31, 2006 at the earliest.” Horton further asserted the contract, as amended, contemplated the purchase and sale of the townhouse lots in three, separate, quarterly takedowns. Horton therefore indicated it would close on thirty-seven townhouse lots on August 31, 2006, would purchase a like number of them on November 30, 2006, and would close on the remaining lots on February 28, 2007. Horton proposed the parties execute a second amended contract, which would establish the new takedown schedule.

On August 18, 2006, Horton sent Smith a draft of the proposed “Second Amendment,” setting forth a new schedule with Phase 3E–1 to close on or before September 5, 2006, 3E–2 to close on or before December 5.2006, and 3E–3 to close on or before March 6, 2007. On September 13, 2006, Mitchell Flannery, from Horton, sent Tim Fraylick, with Wescott, an email attaching the proposed “Second Amendment,” and indicating it had “36 units funded for takedown 1” and agreeing to “take 40 units down the 2nd phase and 36 the last.” Horton also discussed the possibility of shrinking the takedown to “2 months apart rather than 3 months apart with the first closing immediately.” On September 18, 2006, Flannery sent Fraylick another email, stating the parties needed to close on the funded units in the next few weeks, or he would have to “send the money back to corporate.” Flannery indicated “[t]o give a little,” he proposed they “shrink the takedown over 2 months rather than 3,” and stated, “If you all don't agree to this the property could be tied up for a lot longer than this so I hope you will consider my proposal.” Another proposed “Second Amendment” was attached to the email, this one setting forth closing dates for the three phases of October 5, 2006, December 5, 2006, and February 6, 2007.

On October 16, 2006, Horton's attorney, Michael Shetterly, wrote Wescott's attorney, Smith, referencing their conversation of October 11, 2006, and stating Wescott had not complied with the conditions precedent requirements set forth in the parties' contract as amended. In particular, Shetterly indicated that subparts (i) and (j) of paragraph 15 had not been met inasmuch as there was no evidence under subpart (i) of erosion control in place, and Horton had not seen any “sign-off” from a governmental entity showing erosion control had been erected, and no street lights had been installed pursuant to subpart (j). Shetterly stated Horton offered to forgive the remaining conditions precedent and assume the conditions precedent as Horton's obligations in exchange for a reasonable takedown schedule in three phases, beginning in October and concluding in February.

On November 6, 2006...