Gilliland v. Elmwood Properties

• Court: South Carolina Supreme Court
• Writing for the Court: TOAL; GREGORY, C.J., HARWELL, J., and HUGHSTON and HOWELL
• Citation: Gilliland v. Elmwood Properties, 301 S.C. 295, 391 S.E.2d 577 (S.C. 1990)
• Decision Date: 20 March 1990
• Docket Number: No. 23206,23206
• Parties: A. Dale GILLILAND, Respondent, v. ELMWOOD PROPERTIES, a South Carolina general partnership, Robert A. Causey, Woodie R. Smith, Charles M. Mulherin and Allen P. Howell, individually and as partners of Elmwood Properties, a South Carolina general partnership, Petitioners. . Heard

Page 577

391 S.E.2d 577

301 S.C. 295

A. Dale GILLILAND, Respondent, v. ELMWOOD PROPERTIES, a South Carolina general partnership Robert A. Causey, Woodie R. Smith, Charles M. Mulherin and Allen P. Howell, individually and as partners of Elmwood Properties, a South Carolina general partnership, Petitioners.

No. 23206.

Supreme Court of South Carolina.

Heard March 20, 1990.

Decided April 30, 1990.

G. Trenholm Walker of Wise & Cole, P.A., Charleston, for petitioners.

Judson F. Ayers, of Ayers & Anderson, Greenwood, for respondent.

TOAL, Justice:

We granted certiorari to review the Court of Appeals' opinion in Gilliland v. Elmwood Properties, 297 S.C. 197, 375 S.E.2d 342 (1988). This case involves three issues: (I) whether summary judgment should have been granted the plaintiff on his breach of contract action on the ground that a certain contractual clause was unambiguous; (II) whether summary judgment should have been granted the plaintiff on the ground that the defendants failed to allege and/or provide evidence of a recognizable counterclaim in tort; and (III) whether the parol evidence rule operates to defeat the defendants' counterclaim for breach of contract. The Court of Appeals affirmed the trial court's granting of partial summary judgment in favor of the plaintiff on all of these issues. ¹ We reverse on issues (I) and (II) and affirm on issue (III).

FACTS

A. Dale Gilliland, an architect, brought a breach of contract action demanding payment for services rendered against the petitioners, Elmwood Properties, Robert Causey, Woodie Smith, Charles Mulherin, and Allen Howell (collectively Elmwood). Elmwood answered, denying payment was due, and counterclaimed. As one of its defenses, Elmwood asserted a failure of a condition precedent, viz, that because financing was impossible to obtain on the construction project, no payments were due Gilliland. Elmwood's counterclaims included assertions of negligence and breach of contract.

Specifically, Elmwood pled that Gilliland breached the contract by failing to design a project which would qualify for tax exempt bond funding; failing to observe the project's budgetary constraints; failing to design a project feasible for conventional financing; and failing to obtain necessary municipal and governmental agency approvals for construction of the project. Additionally, Elmwood alleged specifically that Gilliland was negligent in representing that the project he designed would qualify for tax exempt bond funding and in thereby inducing Elmwood to contract with him; designing a project that failed to qualify for such funding; grossly underestimating the probable construction costs for the project; and in other particulars essentially identical to those claimed as breaches of contract.

LAW/ANALYSIS

I. Plaintiff's Breach of Contract Claim

Gilliland provided certain architectural services for Elmwood and asserts that he is contractually due payment for them. The trial court and Court of Appeals held that the contract between the parties was unambiguous and lacked a condition precedent to payment, and that therefore Elmwood was not excused from payment. Payment to the architect is governed by a handwritten provision in the parties' contract. This provision reads:

Payment to the architect shall be made by the owner at loan closing (project loan closing) upon invoice by the architect. If project is approved and not closed by the owner after the completion of architectural and engineering contract documents (plans and specifications) moneys due the architect will be payable by the project owners individually or collectively within 30 days after invoice by the architect, as each partner's interest appear [sic] in their agreement.

Gilliland argues that this provision means that, once the owners (Elmwood) approved the "project" (defined by Gilliland as the plans and specifications), moneys were due. The remainder of the provision means, according to Gilliland, that if a loan were closed for the project, payment would be due him upon the owner's receipt of his invoice. Alternatively, if a loan were not closed, the individual partners would pay him for his services within 30 days after their receipt of his invoice.

Elmwood contends that the clause is a condition precedent to payment. It argues that, if a loan were approved and closed, payment would be made upon invoice. Elmwood asserts that if a loan were approved for the project, but the owners decided not to close on the loan, the clause provides for payment to Gilliland 30 days after invoice. If no loan were approved, Elmwood argues, no payment was due Gilliland whatsoever, as all parties understood that payments would be made from loan funds.

Two members of the Court of Appeals panel, and thus a majority, held that the clause was not ambiguous and clearly should be interpreted in the way Gilliland urges. One member of the panel penned a dissent, stating he would hold that the provision was ambiguous.

"Summary judgment should not be granted even when there is no dispute as to the evidentiary facts if there is dispute as to the conclusions to be drawn from those facts." Piedmont Engineers, Architects and Planners, Inc. v. First Hartford Realty Corp., 278 S.C. 195, 196, 293 S.E.2d 706, 707 (1982). This Court need not decide that it favors Gilliland's or Elmwood's view of the contractual provision at this juncture; we need only opine on whether the provision is ambiguous. See Bishop v. Benson, 297 S.C. 14, 374 S.E.2d 517 (Ct.App.1988) (summary judgment improper on a construction of contract issue where the intention of the parties as to the meaning of the contract may not be gathered from the four corners of the instrument).

"An ambiguous contract is one capable of being understood in more senses than one, an agreement obscure in meaning, through indefiniteness of expression, or having a double meaning." Bruce v. Blalock, 241 S.C. 155, 160, 127 S.E.2d 439, 441 (1962). In ruling on a motion for summary judgment, the court must construe all inferences and conclusions arising in and from the evidence most strongly against the moving party. Lyles v. BMI, Inc., 292 S.C. 153, 355 S.E.2d 282 (1987). We hold that the granting of summary judgment in favor of Gilliland was improper. We agree with the dissenter on the Court of Appeals panel that this provision is ambiguous.

II. Defendants' Counterclaim in Tort

Gilliland moved for summary judgment on Elmwood's counterclaim for negligence "on the grounds that the breach of contract is not actionable as a tort and on the further grounds that there was no duty on the part of the plaintiff, aside from the contract, to perform ... [the acts complained of by Elmwood]." (Tr. 49). The trial court ruled, and the Court of Appeals agreed, that "[a] mere breach of contract is not actionable as a tort, no matter what the intent of the breaching party was. No relationship [giving rise to a tort duty] beyond the contract has been demonstrated or discerned and consequently Plaintiff's Motion for Summary Judgment on this issue is granted." (Tr. 131).

Elmwood's counterclaim contained allegations that, as mentioned above, Gilliland was negligent in making certain representations which induced Elmwood to contract, and that Gilliland negligently designed the project, negligently estimated construction costs, and negligently failed to obtain certain necessary governmental approvals. We disagree with the Court of Appeals' holding that Elmwood has failed to plead and/or demonstrate facts showing a tort duty existing independent of the contract.

We do adhere to the Court of Appeals' ruling insofar as Elmwood's claims of architect malpractice are concerned. The well known rule still exists that generally, in a malpractice case, "there can be no finding of negligence in the absence of expert testimony to support it." D. DOBBS, R. KEETON, & D. OWEN, PROSSER AND KEETON ON TORTS, 188 (5th ed. 1984) (citing, inter alia, 530 East 89 Corp. v. Unger, 43 N.Y.2d 776, 402...