Laser Supply v. Orchard Park Associates

• Decision Date: 19 February 2009
• Docket Number: No. 4503.,4503.
• Citation: 676 S.E.2d 139
• Court: South Carolina Court of Appeals
• Parties: LASER SUPPLY AND SERVICES, INC., Appellant, v. ORCHARD PARK ASSOCIATES, d/b/a Orchard Park Apartments, Respondent.

676 S.E.2d 139

LASER SUPPLY AND SERVICES, INC., Appellant, v. ORCHARD PARK ASSOCIATES, d/b/a Orchard Park Apartments, Respondent.

No. 4503.

Court of Appeals of South Carolina.

Heard October 7, 2008.

Decided February 19, 2009.

E. Wade Mullins, III, of Columbia, for Appellant.

R. Patrick Smith, of Greenville, for Respondent.

GEATHERS, J.:

This breach of contract action arises from a dispute over the completion of remediation construction at the Orchard Park Apartments in Greenville, South Carolina. Appellant Laser Supply & Services, Inc. (Laser) seeks review of the circuit court's order awarding damages and attorney fees to Respondent Orchard Park Associates (Orchard). The essence of Laser's appeal is a challenge to the ruling that the parties' contract called for completion of work on a "per building" basis, rather than completion of work when the specified quantities of materials had been exhausted. We affirm in part, reverse in part, and remand for additional findings on the issue of attorney fees and costs.

FACTS/PROCEDURAL HISTORY

On or about March 4, 2003, Laser and Orchard entered into a contract for roof repair work at the Orchard Park Apartments in Greenville (the roof contract). Later, on April 1, 2003, the parties entered into a separate contract for exterior wood siding repair and replacement at the same site (the siding contract). Incorporated into the siding contract is a document entitled "EXHIBIT I—SCOPE OF WORK." Exhibit I limits the quantities of materials that may be used for the work and requires Orchard's approval of a change order prior to Laser's use of quantities exceeding those limits. Notably, the contract affirms that, prior to its execution, Laser had inspected the premises for job conditions. However, Laser did not perform such an inspection prior to executing the contract.

Exhibit I also includes a payment schedule allowing Laser to submit invoices after the completion of work on specified buildings and requiring Orchard to remit payment within twenty-one days of each invoice date. Laser began the remediation work in April 2003 and submitted its first invoice to Orchard on April 11, seeking payment for the completion of work on the clubhouse, shop, and four apartment buildings, even though Laser did not actually complete work on those buildings until sometime after May 1. Laser's first five invoices were approved for payment soon after Laser submitted them. However, Orchard did not actually process payments on those invoices until August 8.

ConAm Management Corporation (ConAm) was responsible for administering both contracts on behalf of Orchard. ConAm's Southeast Regional Maintenance Director, David Young (Young), drafted the contracts and oversaw Laser's work progress. Soon after Laser began the remediation, Young noticed workmanship defects that remained unresolved for several weeks, despite his repeated requests for corrections. He also noticed that Laser was unnecessarily exceeding the quantity limits on materials. On May 1, Young requested Laser to submit a daily or weekly wood usage control sheet. Nonetheless, Laser did not submit usage logs as the project progressed.

On June 2, Young directed Laser to cease further work on the buildings until it addressed and resolved certain workmanship defects. On June 19, Young presented a punch list to Laser and set June 27 as a deadline for resolution of the listed items. Laser did not meet that deadline. On July 31, Laser submitted a request for a change order to allow for additional materials to complete the siding contract, but Orchard denied this request.

On August 12, Laser sent an e-mail to ConAm's Regional Portfolio Manager, John Deneen, and to Young notifying them that August 15 would be Laser's last day on the job. Orchard later notified Laser that it was terminating the contract and that it would hire a replacement contractor to finish the project. By November 20, Orchard signed a remediation contract with another contractor, Services Unlimited. Services Unlimited completed the work by December 19, and Orchard paid Services Unlimited a total of $41,400.

Several months later, Laser filed an action for breach of contract, along with several other causes of action, against Orchard and ConAm. Orchard responded with a breach of contract counterclaim and several other counterclaims. Orchard and ConAm then filed separate motions for summary judgment on all of Laser's claims on the ground that Laser failed to obtain the necessary licensure for the work required by the contracts. The circuit court granted Orchard's and ConAm's summary judgment motions and entered judgment against Laser on all of its claims. Laser appealed the circuit court's summary judgment order; however, this court dismissed the appeal because of Laser's failure to comply with Rule 207, SCACR.¹

As to Orchard's counterclaims, Orchard elected to abandon all of its claims except the breach of contract claim relating to the siding contract. The circuit court conducted a trial on the breach of contract claim and awarded Orchard damages in the amount of $36,795 and attorney fees and costs in the amount of $86,923.87.² The circuit court later issued a Supplemental Order reducing the damages award to $24,195. This appeal follows.

ISSUES

1. Did the circuit court err in concluding that the parties to the siding contract intended for the work to be completed on a "per building" basis?

2. Did the circuit court err in finding that Laser breached the siding contract?

3. Did the circuit court err in awarding damages to Orchard in the amount of $24,195?

4. Did the circuit court err in awarding attorney fees and costs to Orchard in the amount of $86,923.87?

STANDARD OF REVIEW

A cause of action for breach of contract seeking money damages is an action at law. Eldeco, Inc. v. Charleston County Sch. Dist., 372 S.C. 470, 476, 642 S.E.2d 726, 729 (2007) (internal citations omitted). In an action at law tried without a jury, this court reviews the trial court's decision to correct only errors of law. Seago v. Horry County, 378 S.C. 414, 422, 663 S.E.2d 38, 42 (2008) (internal citations omitted). The trial court's factual findings will not be disturbed on appeal unless there is no evidence in the record that would reasonably support its findings. Id.

LAW/ANALYSIS

I. Parties' intent for completion of work

Laser contends that the circuit court erred in concluding that the siding contract unambiguously required completion of the work on a "per building" basis. Laser argues that (1) the contract was ambiguous with regard to the required scope of work; and (2) extrinsic evidence showed that the parties intended for the work to be considered complete when the quantities of materials specified in the contract had been exhausted. We disagree.

When interpreting a contract, a court must ascertain and give effect to the intention of the parties. Chan v. Thompson, 302 S.C. 285, 289, 395 S.E.2d 731, 734 (Ct. App.1990). To determine the intention of the parties, the court "must first look at the language of the contract...." C.A.N. Enters., Inc. v. S.C. Health & Human Servs. Fin. Comm'n, 296 S.C. 373, 377, 373 S.E.2d 584, 586 (1988).

When the language of a contract is clear and unambiguous, the determination of the parties' intent is a question of law for the court. See Hawkins v. Greenwood Dev. Corp., 328 S.C. 585, 592, 493 S.E.2d 875, 878 (Ct.App.1997) (internal citations omitted). Interpretation of a contract is governed by the objective manifestation of the parties' assent at the time the contract was made, rather than the subjective, after-the-fact meaning one party assigns to it. Bannon v. Knauss, 282 S.C. 589, 593, 320 S.E.2d 470, 472 (Ct.App.1984). A 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. Lindsay v. Lindsay, 328 S.C. 329, 340, 491 S.E.2d 583, 589 (Ct.App.1997).

Whether an ambiguity exists in the language of a contract is also a question of law. S.C. Dep't of Natural Res.s v. Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d 299, 302-03 (2001). A contract is ambiguous when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who (1) has examined the context of the entire integrated agreement; and (2) is cognizant of the customs, practices, usages, and terminology as generally understood in the particular trade or business. Hawkins, 328 S.C. at 592, 493 S.E.2d at 878. Once the court decides that the language is ambiguous, evidence may be admitted to show the intent of the parties. McClellanville, 345 S.C. at 623, 550 S.E.2d at 303 (internal citations omitted). The determination of the parties' intent is then a question of fact. Id.

In the instant case, the siding contract's language concerning the scope of work is incapable of more than one meaning, when viewed objectively by a reasonable person who has examined the context of the entire contract and is aware of the practices and terms as generally understood in the construction industry. See Hawkins, 328 S.C. at 592, 493 S.E.2d at 878. Exhibit I includes a payment schedule allowing invoices to be submitted only after the completion of work on specified buildings. Exhibit I also limits the quantities of materials that may be used for the work and requires Orchard's approval of a change order prior to Laser's use of quantities exceeding those limits.

Further, the second and third pages of Exhibit I to the siding contract contain the following provisions:

This contract is issued as a UNIT PRICE/NOT TO EXCEED CONTRACT and all repairs shall be itemized by building and invoiced at the scheduled price. A log of material quantities used at each building shall be kept and initialed by both the Contractor and Regional Maintenance Director and shall accompany the respective invoices. Should any unforeseen conditions arise which...