Pope v. Heritage Cmtys, Inc.

Decision Date14 September 2011
Docket NumberOpinion No. 4888
PartiesTony L. Pope and Lynn S. Pope, Individually and Representing as a Class all Unit Owners for Riverwalk at Arrowhead Country Club Horizontal Property Regime, Respondents, v. Heritage Communities, Inc., Heritage Riverwalk, Inc., and Buildstar Corporation, Appellants, Riverwalk at Arrowhead Country Club Property Owner's Association, Inc., Respondent, v. Heritage Communities, Inc., Heritage Riverwalk, Inc., and Buildstar Corporation, Appellants.
CourtSouth Carolina Court of Appeals

Appeal From Horry County

Clifton Newman, Circuit Court Judge

AFFIRMED

C. Mitchell Brown, William C. Wood, Jr., A. Mattison Bogan, and Michael J. Anzelmo, all of Columbia; and William L. Howard, Stephen L. Brown, and Russell G. Hines, all of Charleston, for Appellants.

John P. Henry and Philip C. Thompson, both of Conway, for Respondents.

SHORT, J.:

Heritage Communities, Inc. (HCI), Heritage Riverwalk, Inc. (HRI), and BuildStar Corporation (collectively, Appellants) appeal the jury's verdicts in these consolidated construction defect actions. We affirm.

FACTS

Construction on Riverwalk Development (Riverwalk), a condominium complex in Horry County, began in June 1997 and was completed in December 1999. Riverwalk included 228 units in 19 buildings. HCI was the parent corporation of both HRI (the developer and seller), and BuildStar (the general contractor supervising all construction). Prior to and simultaneously with the construction, Appellants developed numerous other properties in Horry County, South Carolina.1 HCI turned management of Riverwalk over to the Riverwalk at Arrowhead Country Club Property Owners' Association, Inc. (the POA) in September 2002.

The POA filed an action against Appellants alleging defects in the construction of Riverwalk. Condominium owners Tony and Lynn Pope (the Popes) also filed an action against Appellants, on their own behalf and on behalf of the owners of Riverwalk, seeking to recover damages for the loss of use of their property during the estimated repair period. By order filed September 3, 2008, the Honorable Benjamin Culbertson certified the Popes and all other unit owners as a class (the Class). The Class and POA actions were consolidated for trial.

The POA and the Class (collectively, Respondents) alleged numerous causes of action including (1) negligence against HCI, HRI, and BuildStar; (2) breach of express warranty against HCI; (3) breach of the warranty of habitability against HRI; (4) breach of the warranty of workmanlike service against BuildStar; and (5) breach of fiduciary duty against HCI and HRI.

The case went to trial on January 5, 2009, before the Honorable Clifton Newman. After the close of Respondents' evidence, the trial court directed a verdict for HCI on the express warranty cause of action and for BuildStar on the warranty of workmanlike service cause of action. At the close of all evidence, the trial court granted Respondents' motions for directed verdicts on the negligence claims. The jury returned a verdict in favor of the POA for $4.25 million in actual damages and $250,000 in punitive damages. The jury awarded the Class $250,000 in actual damages and $750,000 in punitive damages. This appeal followed.

ISSUES ON APPEAL

I. Did the trial court err in its instructions to the jury?

II. Did the trial court err by ruling Appellants were amalgamated in interests?

III. Did the trial court err by failing to decertify the Class?

IV. Did the trial court err by admitting expert testimony as to loss of use damages?

V. Did the trial court err by admitting evidence of subsequent remedial measures?

VI. Did the trial court err by admitting evidence of construction defects at other HCI developments?

VII. Did the trial court err by granting Respondents' motions for directed verdict on the negligence claims?

VIII. Did the trial court err by denying Appellants' motions for directed verdict and judgment notwithstanding the verdict (JNOV)?

IX. Did the trial court err by permitting the punitive damages awards?

STANDARD OF REVIEW

"The standard of review for an appeal of an action at law tried by a jury is restricted to corrections of errors of law. A factual finding of the jury will not be disturbed unless there is no evidence which reasonably supports the findings of the jury." Felder v. K-Mart Corp., 297 S.C. 446, 448, 377 S.E.2d 332, 333 (1989).

LAW/ANALYSIS
I. Jury Instructions

Appellants argue the trial court erred in its instructions to the jury. We find no reversible error.

a. Willfulness, Wantonness, and Recklessness in Defining Negligence

Appellants maintain the trial court erred in charging the jury by including the standard of willful, wanton, and reckless conduct in the definition of simple negligence, which effectively required the jury to find the recklessness necessary to award punitive damages.

In instructing the jury, the court charged:

Now, [Respondents] allege that [Appellants] negligently constructed the Riverwalk Condominiums. Negligence is the failure to exercise the degree of care which a person or entity of ordinary reason and prudence would exercise under the same or similar circumstances as exist[] in this case. Carelessness and negligence mean[] the same thing.
To establish negligent construction[,] [Respondents] must prove four essential elements. One, that there was an undertaking to construct a building by [Appellants; two] that [Appellants] were negligent or careless or reckless, willful and wanton in the performance of that construction work, or stated another way, that they did not perform the work in a good and workman[-]like manner.
Three, that the negligence or carelessness or recklessness, willfulness and wantonness of [Appellants] in performing that construction work was a proximate cause of any damages sustained by [Respondents].
And four, the resulting damages must be shown.
Negligence is not actionable unless it proximately causes [Respondents'] damages. . . .

(emphasis added).

Later in the charge, the court addressed punitive damages:

Punitive damages can only be awarded where [Respondents] prove by clear and convincing evidence that [Appellants'] actions were willful, wanton, malicious and in reckless disregard of [Respondents'] rights or where [Appellants'] actions were so grossly negligent as to imply a willfulness or wantonness. A conscious failure to exercise due care constitutes willfulness. . . .
. . . .
[Respondents] cannot recover punitive damages based on negligent conduct. Negligence is the doing of some act which a person of ordinary prudence would not have done under similar circumstances . . . . Mere negligence will not support a punitive damages award. To recover punitive damages [Respondents] must prove by clear and convincing evidence that [Appellants'] actions were willful, wanton or reckless or so grossly negligent as to imply a willfulness or wantonness.
The word[s] recklessness, willfulness[,] and wantonness are synonymous. The terms are used to describe a conscious failure to exercise and observe reasonable or due care. Recklessness is distinguished from negligence. Negligence is the failure to use due care. Negligence is carelessness, as mentioned earlier. Negligence is a failure by omission or commission to exercise due care as a person of ordinary reason and prudence would exercise in the same circumstances. Recklessness is a higher degree of culpability and responsibility. Recklessness signifies a conscious failure to exercise due care. Recklessness is a conscious indifference to the rights of [Respondents] or a reckless disregard of the rights of [Respondents]. Recklessness is an awareness of wrongful conduct and continuation to act regardless of consequences.
Gross negligence is the intentional conscious failure to do something which is incumbent upon one to do or the doing of a thing intentionally that one ought not to do. Negligence is the failure to exercise due care, while gross negligence is the failure to exercise even the slightest care. . . .

(emphasis added).

Appellants argue the instruction, combined with the grant of directed verdicts to Respondents on negligence, suggested to the jury the court had already determined that Appellants were willful, wanton, and reckless. We find no reversible error.

In reviewing an alleged error in jury instructions, we are mindful that an appellate court will not reverse the trial court's decision absent an abuse of discretion. See Cole v. Raut, 378 S.C. 398, 404, 663 S.E.2d 30, 33 (2008) (applying an abuse of discretion standard of review to an alleged error in jury instructions). Furthermore, an appellate court will review the charge as a whole. See Keaton ex rel. Foster v. Greenville Hosp. Sys., 334 S.C. 488, 497, 514 S.E.2d 570, 575 (1999) (finding a jury charge should be reviewed as a whole, and if the charges are reasonably free from error, isolated portions that might be misleading do not constitute reversible error). Here, although the trial court's initial language in instructing the jury on negligence may have been a misstatement of law, the court then extensively defined willful, wanton, and reckless conduct and instructed the jury on the difference between mere negligence and willful, wanton, and reckless conduct. In reading the charge in its entirety, we find no prejudice to Appellants. See Priest v. Scott, 266 S.C. 321, 324, 223 S.E.2d 36, 38 (1976) (finding an alleged error in a jury charge must be prejudicial to warrant a new trial).

b. Mandatory Award of Damages

Appellants also argue the trial court's jury charge was erroneous because it required the jury to award actual damages on the negligence claims. Appellants argue the charge inappropriately conveyed to the jury that the directed verdicts on negligence extended to proximate cause and should only have conveyed the court's determination of duty and breach.2 We find no reversible error.

During opening arguments, Appellants conceded that construction...

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