Middleborough Horizontal Property Regime Council of Co-Owners v. Montedison S.p.A.
| Citation | 320 S.C. 470,465 S.E.2d 765 |
| Decision Date | 03 October 1995 |
| Docket Number | CO-OWNER,R,No. 2429,2429 |
| Court | Court of Appeals of South Carolina |
| Parties | MIDDLEBOROUGH HORIZONTAL PROPERTY REGIME COUNCIL OFespondent, v. MONTEDISON S.p.A., Montedison USA, Inc., Flag S.A.S., Watpro, Inc., and Flex Membrane International Corp., successor to Watpro, Inc., Middleborough, a Limited Partnership, Howard G. Love, Love & Cobb, Architects, Incorporated, n/k/a A Touch of Country, Inc., Southeastern Waterproofing Company, Inc., RELM, Inc. and William J. Cleary, Defendants, of whom: Montedison S.p.A., Montedison USA, Inc., are Appellants, and Howard G. Love, Love & Cobb, Architects, Incorporated, n/k/a A Touch of Country, Inc., are Respondents. . Heard |
William L. Pope and Roy F. Laney, Columbia, for appellants.
Warren C. Powell, Jr., and Ronald E. Robbins, Bruner & Powell; and Evans Taylor Barnette, of Whaley, McCutchen, Blanton & Rhodes, Columbia, for respondents.
Respondent, Middleborough Horizontal Property Regime Council of Co-owners (the Regime), 1 instituted this action against appellants, Montedison S.p.A. and Montedison USA, Inc. (referred to collectively as Montedison) and others, for damages sustained as a result of defective roofing materials installed on the condominiums. The Regime alleged several causes of action including negligence, breach of implied warranty, breach of express warranty, strict liability in tort, breach of warranty accompanied by fraudulent conduct, and violation of the Unfair Trade Practices Act. Prior to trial, the court granted the Regime's motion for partial summary judgment as to liability against Montedison on the ground of non-mutual offensive collateral estoppel. Montedison appeals. We affirm in part, reverse in part and remand.
Montedison S.p.A. is an Italian chemical corporation. Montedison USA, Inc. is a wholly owned subsidiary of Montedison S.p.A. and markets certain Montedison S.p.A. chemical products in the United States. During the period relevant to this action, Montedison engaged in the research, development, and production of polyvinylcholoride (PVC). Flag S.A.S. (Flag), an Italian corporation formed by former Montedison employees, purchased the raw PVC in pellet form from Montedison. Flag processed the PVC pellets into vinyl sheets of waterproofing material called Flagon C and Flagon SF under the direction and control of Montedison. The Flagon materials were rolled onto roofs in much the same manner as a carpet would be rolled onto a floor and were used to provide a watertight barrier on roofs. Watpro, a New Jersey corporation which is now bankrupt, distributed Flagon SF and Flagon C materials in the United States.
In 1981, Middleborough Apartments were converted into condominium units. As part of the conversion, the roof was replaced. Middleborough contracted with Love and Cobb Architects to provide architectural services related to the replacement of the roof, and with Southeastern Waterproofing Company, Inc. to install the roof.
After conferring with Love and Cobb, Southeastern decided to replace the roof using Flagon C materials. The new roof consisted of a 1 1/2 inch layer of expanded polystyrene insulation placed over the existing roof, a layer of Flagon C roofing membrane, and a layer of washed river stones as ballast. 2
On October 14, 1981, Flag issued two consecutive five year written guarantees to Middleborough whereby it guaranteed "to maintain the Flagon roof ... in a watertight condition." Within the warranty period, the roofing system failed, resulting in extensive water damage to the condominiums due to leakage. The Regime notified Southeastern, Watpro, and Flag of the leakage, but was unsuccessful in its attempts to have the roof repaired. Eventually, the Regime had the roof repaired at its own expense. The instant litigation ensued.
Prior to trial, the Regime moved for partial summary judgment against Montedison as to liability. The motion was premised on the fact that "underlying issues regarding the role, responsibility, and liability for the development, production, and marketing of the roofing material which failed [had] been previously adjudicated against [Montedison]" who was collaterally estopped from relitigating those issues. In support of this argument, the Regime referred the trial court to the Minnesota Supreme Court's holding and findings of fact in Church of the Nativity of Our Lord v. WatPro, Inc., Montedison S.p.A. and Montedison U.S.A. Inc., et al., 491 N.W.2d 1 (Minn.1992), aff'g 474 N.W.2d 605 (Minn.Ct.App.1991) wherein Montedison was found liable for damages resulting from a failed Flagon roof.
In opposition to the Regime's motion, Montedison argues summary judgment on the basis of offensive collateral estoppel was improper because the instant litigation involves issues which were not litigated in Nativity. Montedison also argued the trial court should not give collateral estoppel effect to the holding in Nativity because it is inconsistent with the holding in Curtiss-Wright Corp. v. Rainbow Roofing, et al., No. L-35834-88, L-39567-88 (N.J.Super.Ct.Law Div.1991), a subsequent action wherein Montedison was found not liable for a failed Flagon roof.
At the heart of Montedison's appellate arguments is its contention the trial court erred in granting the Regime's motion for partial summary judgment because issues relating to liability in this case have not been previously litigated. Specifically, Montedison contends, among other things, that the issue of whether or not the Flagon roof involved in this case was properly installed has never been litigated because the Nativity case did not involve a claim of improper installation. Montedison claims there exists evidence the Regime's roof failed because it was improperly installed on a building which exceeded the height limitations permitted by Flagon C specifications, whereas the Nativity adjudication did not involve claims of faulty installation. To establish that the failure in the Regime's roof may have been due to improper installation, Montedison referred the court to the deposition of Floyd Abrams, a certified roof consultant retained by the Regime. Abrams testified he inspected the roof and found it was improperly installed on a building higher than the manufacturer's specifications. Abrams also testified the roof was not properly ballasted. Although Abrams was unable to state with certainty a specific reason the roof failed, he opined that installing the Flagon roof on a structure higher than the manufacturer's specifications permitted could have caused the problems which occurred with the Middleborough roof.
The doctrine of non-mutual offensive collateral estoppel was adopted in this State by this court in Beall v. Doe, 281 S.C. 363, 315 S.E.2d 186 (Ct.App.1984), and was confirmed as the law of this State by our Supreme Court in South Carolina Prop. and Cas. Ins. Guar. Ass'n v. Wal-Mart Stores, Inc., 304 S.C. 210, 403 S.E.2d 625 (1991). Under the doctrine of offensive non-mutual collateral estoppel, a party may be prevented from relitigating issues actually determined in a prior action so long as the party estopped had a full and fair opportunity to litigate the issue in the first action and there are no circumstances which justify affording him an opportunity to retry the issue. Beall, 281 S.C. 363, 315 S.E.2d 186; Roberts v. Recovery Bur., Inc., 316 S.C. 492, 450 S.E.2d 616 (Ct.App.1994) (citing McPherson v. South Carolina Dept. of Highways and Pub. Transp., 297 S.C. 303, 376 S.E.2d 780 (Ct.App.1989)).
While it is true improper installation was not an issue in Nativity, we agree with the trial court that Montedison's agency relationship with Flag and Watpro and the question of the defectiveness of the Flagon material were litigated. In Nativity, Flag issued guarantees on a Flagon roof. 3 The Nativity court found an agency relationship existed between Montedison and Flag as well as between Montedison and Watpro. The Nativity court further found that all of Flag's and Watpro's activities relevant in Nativity, including the issuance of guarantees, fell within the scope of their agency relationship with Montedison. Montedison is precluded, therefore, from denying its agency relationship with Flag and Watpro for purposes of having issued the guarantees on the Regime's roof.
We further hold Montedison is precluded from relitigating issues concerning defects in the Flagon material. The Nativity court held the Flagon materials 4 installed on the Church's roof were defective due to an improper chemical formulation which causes plastercizer migration. Because Montedison does not claim the Flagon C material installed on the Middleborough roof is any different from the Flagon C material installed on the Nativity roof, Montedison is estopped from denying the product is defective.
Montedison also maintains the trial court erred in giving preclusive effect to the Nativity decision because that decision is inconsistent with the Curtiss-Wright decision. Montedison argues that under the doctrine of res judicata, when two inconsistent final judgments are rendered, the latter judgment is accorded conclusive effect in a third action. Restatement (Second) of Judgments § 15 (1982). While these are correct statements of law, we cannot under the facts of this case determine the applicability of Curtiss-Wright. The text of the Curtiss-Wright decision was neither introduced into the trial record, nor included in the record on appeal. Therefore, no competent evidence exists from which we can glean the full implications of the decision. 5 See State v. Thompson, 305 S.C. 496, 409 S.E.2d 420 (Ct.App.1991) (); Copeland v. Craig, 193 S.C. 484, 8 S.E.2d 858 (1940) (...
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