Franke Associates by Simmons v. Russell, 22867

• Decision Date: 18 January 1988
• Docket Number: No. 22867,22867
• Citation: 295 S.C. 327,368 S.E.2d 462
• Court: South Carolina Supreme Court
• Parties: FRANKE ASSOCIATES, A Limited Partnership, By Harold SIMMONS and Fred C. Smith, Jr., as its General Partners, Appellants, v. Robert B. RUSSELL and First Federal Savings and Loan Association of South Carolina, Respondents. . Heard

Page 462

368 S.E.2d 462

295 S.C. 327

FRANKE ASSOCIATES, A Limited Partnership, By Harold SIMMONS and Fred C. Smith, Jr., as its General Partners, Appellants, v. Robert B. RUSSELL and First Federal Savings and Loan

Association of South Carolina, Respondents.

No. 22867.

Supreme Court of South Carolina.

Heard Jan. 18, 1988.

Decided May 9, 1988.

Morris D. Rosen and H. Brewton Hagood of Rosen, Rosen & Hagood, Charleston, for appellants.

Claron A. Robertson, III of Buist, Moore, Smythe & McGee, Charleston, for respondent Robert B. Russell.

W. Jefferson Leath, Jr. of Young, Clement, Rivers & Tisdale, Charleston, for respondent First Federal Sav. and Loan Ass'n of South Carolina.

FINNEY, Justice:

Appellant Franke Associates, a limited partnership, through its general partners, Harold Simmons and Fred C. Smith, Jr., brought suit against respondents Robert Russell and First Federal Savings and Loan Association of South Carolina (First Federal) for monies allegedly due for condominium unit improvements. Franke Associates alleged three causes of action in its complaint: (1) a mechanic's lien foreclosure, (2) breach of contract, and (3) unjust enrichment and/or quantum meruit. The trial court granted respondents' motion for summary judgment on the mechanic's lien cause of action. With respect to the second and third causes of action, the trial court ruled at the close of all the evidence that appellant was required to elect between the causes of action for breach of contract and quantum meruit. Subject to its objection, appellant elected to proceed on the breach of contract cause of action. The jury returned a verdict in favor of respondent Russell. We affirm in part, reverse in part and remand this case for a new trial.

Smith, Simmons & Associates, a general partnership formed by Fred C. Smith and Harold Simmons, acquired a warehouse in 1981 known as the "Franke Building." The partnership determined that the warehouse should be renovated and converted into an office condominium complex. The plan was for a newly formed limited partnership, Franke Associates, to purchase the unimproved building from Smith, Simmons & Associates, make renovations, and sell the office condominium units. The purchasers of the condominiums would, in turn, become limited partners in Franke Associates.

In November, 1983, Russell negotiated with Smith and Simmons for the sale of three office condominium units for $660,000. Rather than pay Franke Associates $660,000, the transaction was restructured and modified from the original development plan so that Russell could effect a tax-free exchange. In particular, Smith, Simmons & Associates did not sell the unimproved warehouse solely to Franke Associates, but sold Russell a twenty-five percent undivided interest in the warehouse for $660,000 and subsequently effectuated an agreement under which Russell was to pay an additional $210,750.

Russell then agreed to transfer his twenty-five percent interest in the Franke Building in exchange for three office condominiums. On December 27, 1984, Russell acquired title to the condominiums with First Federal as the mortgagee.

Thereafter Franke Associates demanded that Russell pay additional consideration of $750,000, which it asserts is the cost for renovating the condominium office units. Russell asserts that he had a fixed-price agreement, which was not to be affected by renovation costs, and that $870,750 is the total cost of his units as evidenced in the deed. Conversely, appellant argues that Russell agreed to pay Franke Associates the cost of renovating his three units. As a result of this factual dispute, Franke Associates initiated this lawsuit to recover $750,000 renovation costs from respondents.

First, appellant argues that the trial court erred in granting First Federal's motion for summary judgment and Russell's motion for partial summary judgment as to the mechanic's lien foreclosure cause of action, contending that there exists a genuine issue of material fact.

Section 29-5-90 of the South Carolina Code of Laws states that a person seeking to assert a mechanic's lien must file notice of such within ninety days after he ceases to labor or furnish labor or materials for a building. S.C.Code Ann. § 29-5-90 (1976). Appellant claims it is entitled to a mechanic's lien for the value of the labor and materials associated with renovation costs to Russell's units. These costs were incurred prior to May 10, 1985.

The record indicates that the mechanic's lien, notice and certificate were filed on August 29, 1985, nineteen days after expiration of the ninety-day statutory filing period. See, e.g., Shelley Constr. Co. v. Seagarden Homes, Inc., 287 S.C. 24, 336 S.E.2d 488 (1985); Hodge v. First Federal Sav. & Loan Assn., 267 S.C. 270, 227 S.E.2d 310 (1976). We concur with the circuit court's ruling that appellant's lien was barred because it was not filed within the requisite ninety-day period.

Next, appellant argues that the trial court erred by requiring them to elect, prior to the submission of the case to the jury, between the remedies for breach of contract and quantum meruit. We agree.

Prior to trial, respondent Russell moved to require appellant to elect between the two causes of action. The court denied respondent's motion. At the close of appellant's case, respondent motioned for a directed verdict on the quantum meruit cause of action. The court denied the motion. Respondent made a subsequent motion to require an election between the causes of action for breach of contract and quantum meruit prior to closing argument. After considerable debate and with obvious concern, the trial court granted respondents' motion, and appellant elected to proceed on the breach of contract theory. ¹

Whether the trial judge erred in requiring appellant to elect between causes of action prior to closing argument because of the case's complexity is a novel issue. Rule 8(e)(2) of the South Carolina Rules of Civil Procedure permits a party to plead inconsistent causes of action but is silent on whether a plaintiff must elect between remedies emanating from inconsistent causes of action.

"[O]ur law has traditionally focused on inconsistency of causes of action as a basis for requiring an election." Harper v. Ethridge, 290 S.C. 112, 120, 348 S.E.2d 374 (Ct.App.1986); see also Tzouvelekas v. Tzouvelekas, 206 S.C. 90, 33 S.E.2d 73 (1945). However, the progeny of cases involving election between causes of action primarily address the issue of requiring an election prior to trial. See, Tzouvelekas v. Tzouvelekas, supra; Harper v. Ethridge, supra; H.G. Hall Const. Co. v. J.E.P. Enterprises, 283 S.C. 196, 321 S.E.2d 267 (Ct.App.1984); Harmon v. Jenkins, 282 S.C. 189, 318 S.E.2d 371 (Ct.App.1984); Boardman v. Lovett Enterprises, Inc., 283 S.C. 425, 323 S.E.2d 784 (Ct.App.1984). While no case is directly on point with respect to requiring an election prior to closing argument, the Court of Appeals in Harper v. Ethridge held that it is within a trial judge's discretion to decide when it is appropriate to require a party to elect his remedy. 348 S.E.2d 374. The court further held that if a party's causes of action are so inconsistent as to be repugnant, he may be required to make an election. However, if a party pleads different causes of action but seeks only one recovery, he need not...