Koontz v. Thomas

• Court: South Carolina Court of Appeals
• Writing for the Court: HEARN.
• Citation: Koontz v. Thomas, 511 S.E.2d 407, 333 S.C. 702 (S.C. App. 1999)
• Decision Date: 25 January 1999
• Docket Number: No. 2933.,2933.
• Parties: Robert S. KOONTZ, Appellant, v. James G. THOMAS, Jr., and Thomas and Denziger, P.A., Respondents.

333 S.C. 702

511 S.E.2d 407

Robert S. KOONTZ, Appellant, v. James G. THOMAS, Jr., and Thomas and Denziger, P.A., Respondents.

No. 2933.

Court of Appeals of South Carolina.

Heard December 9, 1998.

Decided January 25, 1999.

Colden R. Battey, Jr., John M. Tatum, III, and Derek C. Gilbert, all of Harvey & Battey, of Beaufort, for appellant.

Robert F. Masters, II, Claron A. Robertson, III, and Theodore L. Manos, all of Robertson & Associates, of Charleston, for respondents.

HEARN, Judge:

Robert S. Koontz instituted this action against Thomas and Denziger, PA., an architectural firm, and James G. Thomas, Jr. individually (collectively "T & D"), alleging professional negligence, negligent misrepresentation, and breach of contract in connection with an architectural contract. Koontz appeals from summary judgment in favor of T & D on all three causes of action. We affirm.

In December of 1992, Koontz and T & D entered into an agreement for T & D to design Koontz's new residence in Beaufort, South Carolina. The agreement provided that (1) T & D's compensation would be 10% of the cost of construction; (2) T & D did not warrant or represent that actual construction bids or negotiated prices would not vary from any construction cost estimate T & D prepared; (3) there was no fixed upper limit of construction costs established in the contract, and the parties could agree to a limit only in a signed writing; (4) T & D's plans and specifications required Koontz's approval; and (5) the entire project would be completed within twenty four months, unless more time was needed through no fault of T & D.

With Koontz's input, T & D developed a schematic design for the home. The first plans were sent to Koontz on June 22, 1993. On June 10, 1994, after numerous designs, revisions, and modifications, Koontz approved a plan with an $800,000 construction estimate. However, Koontz believed that there was "a good chance that the construction cost could be lower than [T & D's] estimate of $800,000 ." Thereafter, three preselected contractors submitted construction bids. Contrary to Koontz's prediction, the bids ranged from $983,000 to $1.2 million. Koontz terminated the contract and demanded that T & D return all architectural fees paid through the date of termination.

T & D offered to continue working on the project, suggesting revisions and modifications that would lower construction costs, but Koontz refused the offer Subsequently, Koontz hired a different architect to whom he paid $39,463 to design a home that was ultimately constructed for $870,000. Koontz then instituted this action against T & D, alleging professional negligence, negligent misrepresentation, and breach of contract.

On all three causes of action, Koontz made essentially the same allegations. Koontz alleged T & D negligently represented that the construction phase of the building project could be completed for $400,000, and the parties agreed to limit the project to this amount. Thus, T & D was negligent in designing a home exceeding that amount by 100%. Koontz further alleged T & D negligently represented that the preliminary architectural services necessary to the project could be completed within a reasonable time, and that T & D would charge reasonable fees for the design. T & D answered asserting affirmative defenses and counterclaimed for breach of contract and quantum meruit.

On December 27, 1996, T & D moved for summary judgment on all three of Koontz's causes of action. On June 20, 1997, the trial court granted summary judgment in favor of T & D on each cause of action. Koontz's subsequent motion for reconsideration was denied. This appeal followed.

Standard of Review

Summary judgment is appropriate when there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Rule 56(c), SCRCP; Kreutner v. David, 320 S.C. 283, 285, 465 S.E.2d 88, 90 (1995). In ruling on a motion for summary judgment, the trial court must view the evidence and all inferences which can be reasonably drawn therefrom in the light most favorable to the non-moving party. Koester v. Carolina Rental Ctr., Inc., 313 S.C. 490, 493, 443 S.E.2d 392, 394 (1994).

Discussion

I. Summary Judgment Standard

Koontz first argues the trial court used an incorrect standard in considering the motions for summary judgment, noting that in each of the three orders granting summary judgment, the trial court stated it had considered the evidence in the light most favorable to the "Defendants." Such an error would normally warrant reversal because T & D, the defendants, were the moving parties, and the law clearly requires the trial court to view the evidence in the light most favorable to the non-moving party, Koontz. Koester at 493, 443 S.E.2d at 394. However, the trial judge has expressly ruled that his error in this regard was clerical rather than substantive in nature, and the error has been corrected in accordance with Rule 60(a), SCRCP. Having reviewed the relevant orders, we are satisfied that the trial judge's error was indeed clerical and had no prejudicial effect on his reasoning in connection with the summary judgment motions. Accordingly, we decline to address this issue further.

II. Breach of Contract

A. Construction Costs

Koontz asserts the trial court erred in granting T & D summary judgment on his breach of contract claim. Specifically, Koontz alleges parol evidence should have been admissible in the breach of contract action to establish an oral agreement to limit construction costs to $400,000. We disagree.

"Where an agreement is clear and capable of legal construction, the court's only function is to interpret its lawful meaning, discover the intention of the parties as found within the agreement, and give effect to it." Ebert v. Ebert, 320 S.C. 331, 338, 465 S.E.2d 121, 125 (Ct.App.1995),cert. denied, (Oct. 17, 1996). The court must enforce an unambiguous contract according to its terms regardless of its wisdom or folly, apparent unreasonableness, or the parties' failure to guard their rights carefully. Ellis v. Taylor, 316 S.C. 245, 248, 449 S.E.2d 487, 488 (1994). It has long been held that to ascertain the intention of an instrument, the court must first look to its language, and if it is perfectly plain and capable of legal construction, then that language alone determines the instrument's force and effect. Superior Auto. Ins. Co. v. Maners, 261 S.C. 257, 263, 199 S.E.2d 719, 722 (1973); see also McPherson v. J.E. Sirrine & Co., 206 S.C. 183, 204, 33 S.E.2d 501, 509 (1945) (the court cannot read words into a contract which impart a wholly unexpressed intent when the contract was executed); Stewart v. Morris, 84 S.C. 148, 153, 65 S.E. 1044, 1046 (1909) (the court is obliged to interpret the language used in its natural and ordinary sense, except where technical language or the context requires another meaning).

Koontz argues that his contract with T & D is ambiguous because it is "silent as to the amount of construction costs." In support of this contention, Koontz cites Williams & Assocs. v. Ramsey Prod. Corp., 19 N.C.App. 1, 198 S.E.2d 67, cert. denied, 284 N.C. 125, 199 S.E.2d 664 (1973), for the proposition that construction contracts that are silent on the issue of a maximum cost limitation fail to disclose the parties' intention as to the cost of structure contemplated. Under the facts and circumstances of this case, we decline to adopt this reasoning.

"The parol evidence rule prevents the introduction of extrinsic evidence of agreements or understandings contemporaneous with or prior to execution of a written instrument when the extrinsic evidence is to be used to contradict, vary or explain the written instrument." Gilliland v. Elmwood Properties, 301 S.C. 295, 302, 391 S.E.2d 577, 581 (1990). However, if a contract is ambiguous, parol evidence is admissible to ascertain the true meaning and intent of the parties. Klutts Resort Realty, Inc. v. DownRound Dev. Corp., 268 S.C. 80, 89, 232 S.E.2d 20, 25 (1977); Skinner v. Elrod, 308 S.C. 239, 244, 417 S.E.2d 599, 602 (Ct.App.1992). An ambiguous contract is one that can be understood in more ways than just one or is unclear because it expresses its purpose in an indefinite manner. Klutts Resort Realty at 89, 232 S.E.2d at 25.

In our view, the parties' decision not to include a maximum cost limitation in the contract does not create contractual ambiguity. Koontz's contract with T & D specifically addresses the cost of construction, stating the parties expressly declined to set a maximum cost limitation. Moreover, the parties intended to leave open the possibility of a later written agreement. We are aware of no authority, and Koontz cites none, which convinces us the parties to a construction contract may not, without creating contractual ambiguity, decline to set a fixed construction cost in the initial stages of the undertaking.

Koontz further argues that even if the contract is not ambiguous and parol evidence of a prior or contemporaneous agreement is barred, the parties subsequently modified the contract to limit the construction price to $400,000. This argument is likewise unavailing.

A written contract may be modified by oral agreement even if the contract expressly states that all changes must be in writing. Lazer Constr. Co. v. Long, 296 S.C. 127, 130, 370 S.E.2d 900, 902 (Ct.App.1988). However, we are unable to ascertain from the record before us that the parties made such an agreement. Koontz relies upon a letter he wrote on June 7, 1993, setting a construction limit of $400,000. The record does not reveal that T & D accepted this term. Moreover, on June 10, 1994, Koontz wrote a letter indicating his approval of plans and specifications with a construction estimate of $800,000.¹ Thus, any agreement to a $400,000 construction budget made on June 7, 1993, was subsequently modified by T & D's offer and Koontz's acceptance of an $800,000 construction budget...