Madden v. Bent Palm Investments, LLC, 4647.

• Decision Date: 20 January 2010
• Docket Number: No. 4647.,4647.
• Citation: 386 S.C. 459,688 S.E.2d 597
• Court: South Carolina Court of Appeals
• Parties: W.L. MADDEN, Appellant, v. BENT PALM INVESTMENTS, LLC, Roger Douglas Brown, and Tom Williams, Respondents.

688 S.E.2d 597

386 S.C. 459

W.L. MADDEN, Appellant, v. BENT PALM INVESTMENTS, LLC, Roger Douglas Brown, and Tom Williams, Respondents.

No. 4647.

Court of Appeals of South Carolina.

Heard October 7, 2009.

Decided January 20, 2010.

Kenneth C. Hanson, Walter M. Riggs, both of Columbia, for Appellant.

Joseph G. Studemeyer, of Columbia, for Respondents.

THOMAS, J.

In this breach of contract action, W.L. Madden (Appellant) appeals the trial court's award of $1,449, arguing the trial court erred in finding the contract between him and Bent Palm Investments, Inc., to be unambiguous. Appellant argues the court erroneously interpreted the contract and erred in finding him entitled to only $1,449. We affirm as modified.

FACTS

In May of 2004, Appellant entered into an agreement with Bent Palm Investments, Inc. and its owners Roger Brown and Tom Williams (collectively Respondent). The agreement provided Respondent would finance the construction of a speculation house, to be performed by Appellant, at cost. The agreement also stipulated profits from the sale of the house would be split evenly between Appellant and Respondent. Pamela White, a realtor, drafted the agreement which left her with the responsibility of marketing and facilitating a purchase of the home.

The parties entered into an "investor-builder" agreement which provided in pertinent part:

The [parties] agree ... [that] Bent Palm Investments agrees to purchase lot # 340 ... [for] $36,750. Bent Palm Investments also agrees to provide the financing needed for building a custom-spec home to be built by [Appellant] at cost (supplies and labor). A plan for the house has been selected and reviewed by both [parties]. All additional costs to include drawing of plans, permits, tap fees, interest payments on loan, closing costs, realty fees, etc. will be added together and deducted from the gross sales price of the home. Net proceeds will be divided 50/50. ... [Appellant] has estimated a cost per square foot of $72.50. ... Any deviations from the plans or specs ... will need to be approved and signed off by [Respondent]. ... * ATTACHED IS AN ESTIMATED DRAW SCHEDULE AND COST SHEET*.

The attached sheet states:

THE DOLLAR AMOUNTS ARE BASED ON 2196¹ SQUARE FEET X $72.5/FOOT AND 286 SQUARE FEET (FINISHED BONUS ROOM) $5,000 FOR A TOTAL OF $164,355 BUILDING COSTS. ... OPTIONAL SCREEN PORCH COST $6,000 (NOT INCLUDED IN ABOVE FIGURES).

The architect's drawings were affixed to the agreement and originally indicated a front load garage with a heated square footage of 2,198 plus 286 for a bonus room. However, because the parties agreed to change the home to a side load garage, the total heated square footage of the house changed to 2,280, plus 286 square feet for the bonus room, a total increase of 82 heated square feet.

During the course of the construction, Appellant informed Respondent that the house could not be finished for the contract price of $164,355, and work ceased until an additional and unscheduled draw of $22,000 was paid to Appellant. After receipt of this unscheduled draw, Appellant completed construction, and Pamela White facilitated the purchase of the home for $272,525. Shortly after the closing, Appellant submitted an invoice to Respondent and demanded a second unscheduled draw of $20,205.94, claiming the actual construction cost of the house was $209,057.64. Having already paid all scheduled draws plus an additional $22,000 unscheduled draw, for a total of $188,851, Respondent anticipated the $272,525 sale of the home to yield a profit of $28,000, prior to receiving the invoice for a second unscheduled draw. Respondent refused to pay the second unscheduled draw, and Appellant commenced this action for breach of contract, inter alia.

After a bench trial, the court held: (1) Appellant was entitled to total construction expenses in the amount of $176,300, determined by the original $164,355 agreed upon, plus $6,000 for the addition of a screened porch, plus an additional $5,945 for the 82 square foot modification at the estimated price of $72.50/square foot; (2) the total profit of the project was $28,000 to which Appellant was entitled to one half, in the amount of $14,000; (3) because Appellant was entitled to $176,300 in expenses and $14,000 in profits under the contract, Appellant was entitled to a total sum of $190,300; and finally (4) because Appellant had already received $188,851, this left a difference of only $1,449. Accordingly, the trial court's ruling left the remaining $26,551, of the $28,000 in claimed profit, to Respondents.

ISSUES ON APPEAL

I. Did the trial court err in failing to find the contract ambiguous and consequently construing the agreement to be a contract for a fixed price?

II. Did the trial court err by deducting the final outstanding expenses from the Appellant's share of the profits, or in other words, did the trial court err in interpreting the agreement so as to award Appellant only $1,449?

STANDARD OF REVIEW

A breach of contract action is an action at law. Silver v. Aabstract Pools & Spas, Inc., 376 S.C. 585, 590, 658 S.E.2d 539, 541-42 (Ct.App.2008); Conway v. Charleston Lincoln Mercury Inc., 363 S.C. 301, 305, 609 S.E.2d 838, 841 (Ct.App.2005). "In an action at law tried without a jury, an appellate court's scope of review extends merely to the correction of errors of law." Temple v. Tec-Fab, Inc., 381 S.C. 597, 599-600, 675 S.E.2d 414, 415 (2009). Accordingly, "[this] Court will not disturb the trial court's findings unless they are found to be without evidence that reasonably supports those findings." Id.

ANALYSIS

I. Ambiguity of the Contract and Interpretation of Costs

Appellant alleges the trial court erred in failing to find the contract ambiguous, and as a result erred in reading the contract as a construction contract at a fixed price. We disagree.

"The cardinal rule of contract interpretation is to ascertain and give legal effect to the parties' intentions as determined by the contract language." McGill v. Moore, 381 S.C. 179, 185, 672 S.E.2d 571, 574 (2009). The language alone will determine the contract's force where such language is unambiguous; however, where the language is subject to multiple interpretations, the fact finder must determine the parties' intentions from the evidence presented. Compare Schulmeyer v. State Farm Fire & Cas. Co., 353 S.C. 491, 495, 579 S.E.2d 132, 134 (2003) (stating that where the language is clear and unambiguous the intent of the parties is to be derived from the language of the contract) with Charles v. B & B Theatres, Inc., 234 S.C. 15, 18, 106 S.E.2d 455, 456 (1959) (finding that when the contract is ambiguous in its terms other evidence must be considered to ascertain the intent of the parties). A party may not create an ambiguity by reading a single sentence or clause, but rather the contract and the language used must be considered as a whole. Schulmeyer, 353 S.C. at 495, 579 S.E.2d at 134.

In this case, Appellant claims the crux of the parties' disagreement is that the agreement failed to designate the total square footage of the house and whether or not the parties intended the quoted amount of $72.50 per heated square foot or for total square footage under the roof. Appellant maintains that the price of $72.50 per square foot was intended to mean all square footage under the roof, which amounted to 3,140, including the screened porch, garage, and front porch, rather than simply heated square feet. However, we find there is evidence to support the trial court's ruling that Appellant is entitled to $176,300 for construction of the house at the stated rate of $72.50 per heated square foot.

Initially, the INVESTOR-BUILDER AGREEMENT clearly states a house plan had been reviewed and selected by the parties. Appellant had estimated the cost per square foot to be $72.50. Incorporated with the agreement is an ESTIMATED DRAW SCHEDULE AND COST SHEET. This document explicitly states the dollar amounts are based on 2,196² at a price of $72.50 per square foot and a 286 square foot bonus room at an additional $5,000, for a total of $164,355. The sheet also provides an option for the addition of a screened porch for an extra $6,000.

Contrary to Appellant's position, review of the contract and attached documents yields no ambiguity. Initially, the original architect's plans for the selected house delineated a heated square footage of 2,198 with the addition of a 286 square foot bonus room. Considering that the bonus room and screened porch were addressed and provided for separately under the agreement, and the square footage referenced in the original architect's plans mirrored (within 2 square feet) that referenced in the agreement and the draft sheet, the trial court's determination that this contract was to be calculated based on heated square footage is supported by the evidence.

Moreover, the record supports the trial court's conclusion that Appellant was entitled to total costs in the amount of $176,300. First, the parties agreed to change the garage to a side load, rather than a front load. This change increased the total heated square footage of the house by 82 square feet. Therefore, at the agreed upon rate of $72.50 per square foot, Appellant was entitled to an additional $5,945. Furthermore, Appellant constructed the optional screened porch, entitling him to $6,000. In total, these figures coupled with the $5,000 for the bonus room, result in Appellant being entitled to $176,300³ in expenses....