Ezzo v. Smith
| Decision Date | 08 July 2009 |
| Docket Number | 2009-UP-391 |
| Parties | A. Gary Ezzo and Anne Marie Ezzo, Respondents, v. Gregory E. Smith, Appellant. |
| Court | South Carolina Court of Appeals |
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 April 1, 2009
Appeal From Charleston County R. Markley Dennis, Jr., Circuit Court Judge
William Jung, of Mount Pleasant, for Appellant.
William Scott, of Charleston, for Respondents.
In this breach of contract action, Gregory E. Smith appeals the trial court's $11, 000 judgment in favor of A. Gary Ezzo and Anne Marie Ezzo (collectively the Ezzos). We affirm as modified. [1]
The Ezzos purchased a house in Mt. Pleasant from Charleston Building Group, which was owned in part by Smith. At the time of the purchase, Smith was involved in litigation with his partners in Charleston Building Group. The house was only 80% to 85% completed and the Ezzos purchased it "as-is." They subsequently entered into a contract with Smith for completion of the house on February 19, 2002.
The contract, which was prepared by Smith, called for total payment of $136, 200 with the work and payment schedule divided into five phases and payments made in advance. On April 18, 2002, the parties executed a change order with some variations for Phases 2, 3, and 4. The Ezzos paid in advance the full payments for Phases 1, 2, and 4 and 90% of Phase 3. Mr. Ezzo testified that for each phase, Smith failed to complete part of the work required for that phase.
The Certificate of Occupancy was issued on July 31, 2002, and the Ezzos moved into the house that day. Although the work on the house was not complete, the Ezzos had moved to Mt. Pleasant from California and needed a place to live. On August 9, the Ezzos paid Smith $4, 767.00 in advance for Phase 5, making their total payments to Smith $123, 000.00, which was 90% of the contract price. Mr. Ezzo testified he withheld the remainder of the payment because not all of the work had been completed for the previous phases and he had concerns that Smith was not making payments to his subcontractors and vendors. He stated that when he explained his reasons for the partial payment, Smith agreed that it was fair.
During Labor Day weekend, Smith was seriously injured when he fell off a ladder while working at the Ezzos' house. He stated he was bedridden for thirty days and then for another fifteen days he was unable to work. On October 4, 2002, Smith sent the Ezzos an email stating that while he could not perform any physical work himself, he could provide adequate supervision to have the remaining work completed. He requested the Ezzos send him the remaining money owed so the work could be completed. The Ezzos responded in a letter dated October 5, 2002, asserting that they did not owe Smith any money at that time because a considerable amount of work remained unfinished and exceeded the 10% of the contract price that they had retained. In the letter, they listed items that needed to be completed and raised their concerns that subcontractors had yet to be paid. In a letter postmarked November 22, 2002, Smith replied that he disagreed with the Ezzos' position and stated he had complied with the terms of the contract. He asserted that he would not proceed with completing the work on the house. In their reply, the Ezzos requested Smith have the two mechanic's liens placed on the property by vendors removed, correct electrical problems, and provide the remaining screens for the windows. The Ezzos offered to discuss the situation with Smith after these issues were resolved.
The Ezzos eventually brought this action in small claims court. Although they stated their damages exceeded $7, 500.00, they limited their claim to this amount to fall within the jurisdictional limit of small claims court. Smith filed an answer denying the Ezzos' claims and a counterclaim seeking $18, 840.00 in damages. Because the amount Smith sought exceeded the jurisdictional limits of small claims court, the case was transferred to the court of common pleas where the Ezzos filed their reply to Smith's counterclaim.
After a bench trial, the trial court issued a Form 4 order finding in favor of the Ezzos in the amount of $11, 000.00. Smith filed a motion to alter or amend the judgment, asking the court to make finding of facts and conclusions of law. The Ezzos submitted a proposed order in response to which Smith submitted a letter objecting to specific language. The trial court issued an order setting forth several items included in the $11, 000.00 judgment. This appeal followed.
"An action for breach of contract seeking money damages is an action at law." R & G Constr., Inc., v Lowcountry Reg'l Transp. Auth., 343 S.C. 424, 430 540 S.E.2d 113, 117 (Ct. App. 2000). "In an action at law, on appeal of a case tried without a jury, the findings of fact of the judge will not be disturbed upon appeal unless found to be without evidence which reasonably supports the judge's findings." Townes Assocs. Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976). However, "a reviewing court is free to decide questions of law with no particular deference to the trial court." Hunt v. S.C. Forestry Comm'n, 358 S.C. 564, 569, 595 S.E.2d 846, 848-49 (Ct. App. 2004).
Smith argues the trial court erred in ruling Smith breached the contract because the Ezzos' antecedent breach of the contract by withholding payment excused Smith's nonperformance of the contract.
"It is a question of law for the court whether the language of a contract is ambiguous." S.C. Dep't of Natural Res. v. Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d 299, 302-03 (2001). "Whether a contract is ambiguous is to be determined from the entire contract and not from isolated portions of the contract." Farr v. Duke Power Co., 265 S.C. 356, 362, 218 S.E.2d 431, 433 (1975); see Hawkins v. Greenwood Dev. Corp., 328 S.C. 585, 592, 493 S.E.2d 875, 878 (Ct. App. 1997) ().
Construction of an ambiguous contract is a question of fact. Skull Creek Club Ltd. P'ship v. Cook & Book, Inc., 313 S.C. 283, 286, 437 S.E.2d 163, 165 (Ct. App. 1993). When an agreement is ambiguous, the court should seek to determine the parties' intent. Ebert v. Ebert, 320 S.C. 331, 338, 465 S.E.2d 121, 125 (Ct. App. 1995). "Ambiguous language in a contract should be construed liberally and most strongly in favor of the party who did not write or prepare the contract and is not responsible for the ambiguity; and any ambiguity in a contract, doubt, or uncertainty as to its meaning should be resolved against the party who prepared the contract or is responsible for the verbiage." Myrtle Beach Lumber Co. v. Willoughby, 276 S.C. 3, 8, 274 S.E.2d 423, 426 (1981) (quoting 17A C.J.S. Contracts § 324).
In the present case, the contract included several sections regarding payments. Under the payment schedule, the contract provided for payments to be made in advance prior to the start of each phase but allowed the Ezzos to "hold back" at their discretion 10% of that amount until the phase was completed. Article 5.1, as amended, provided final payment was to be made "when the work has been completed, the contract fully performed, and a Certificate of Occupancy has been issued by the local Building Official."
Under Article 15.3, final payment was not due until the contractor provided the owner with a release of all liens or receipts for payment of all labor, materials, and equipment for which a lien could be filed, or a bond to indemnify the owner from such liens. This article further provided, "If such lien remains unsatisfied after payments are made, the Contractor shall refund to the Owner all money that the Owner may be compelled to pay in discharging such lien, including all costs and reasonable attorneys' fees."
The contract is ambiguous with regards to the Ezzos' rights to withhold payment. Reading the contract as a whole, there is evidence to support the trial court's determination that the Ezzos had the right to withhold the funds. Although the payment schedule limited the "hold back" amount from the advance payments to 10% of the amount of that phase, Article 15.2 contains no such limitation on the amount the Ezzos could withhold if the circumstances listed had occurred. The Ezzos presented evidence that at the time work stopped on the house, Smith had not completed any of the five phases and that some of the work completed was defective. In addition, several contractors and vendors had not been paid. The record contains two mechanic's liens filed against the property. Thus, under Articles 15.2 and 15.3, the Ezzos were allowed to withhold payment. Accordingly, there is evidence in the record to support the trial court's determination that Smith was in breach of the contract by refusing to complete the contract.
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