South Carolina Federal Sav. Bank v. Thornton-Crosby Development Co., Inc., THORNTON-CROSBY

Decision Date13 June 1991
Docket NumberNo. 23717,THORNTON-CROSBY,23717
CourtSouth Carolina Supreme Court
PartiesSOUTH CAROLINA FEDERAL SAVINGS BANK, Plaintiff, v.DEVELOPMENT COMPANY, INC., T.R. Tucker Construction Co., Inc., and Hartford Accident and Indemnity Company, Inc., Defendants, of whom Thornton-Crosby Development Company, Inc., is Respondent, and T.R. Tucker Construction Co., Inc. and Hartford Accident and Indemnity Company, Inc., are Petitioners. . Heard

J. Jackson Thomas, of Stevens, Stevens & Thomas, Myrtle Beach, for respondent Thornton-Crosby Development Co., Inc.

Joseph F. Singleton, of Cross, Singleton, Burroughs & Norton, Conway, for petitioner T.R. Tucker Const. Co., Inc.

James B. Richardson, Jr., of Svalina, Richardson & Smith, Columbia, and O. William Faison and Timothy C. Barber, both of Faison, Fletcher, Barber & Gillespie, Durham, N.C., for petitioner Hartford Acc. & Indem. Co.

FINNEY, Justice:

We granted certiorari to review the decision of the Court of Appeals which affirmed the Master-in-Equity's report awarding judgment for actual damages to Respondent Thornton-Crosby Development Company, Inc., ("Developer") against Petitioners T.R. Tucker Construction Co., Inc., ("Builder") and Hartford Accident and Indemnity Co., Inc., ("Surety"); granting judgment for actual damages in favor of Respondent South Carolina Federal Savings Bank ("Bank") against the Surety; and dismissing the counterclaims and cross-claims of the Builder and the Surety. See South Carolina Federal Sav. Bank v. Thornton-Crosby Development Co., Inc., 303 S.C. 74, 399 S.E.2d 8 (Ct.App.1990).

In May of 1984, the Builder contracted to construct and complete by December 31, 1984, an ocean-front eighteen-unit condominium in the Garden City area of Horry County, South Carolina, for the Developer. Financing for the project was provided by stockholder loans and a $1,462,500 construction loan from the Bank to be repaid using proceeds from the sale of condominium units. Prior to the loan closing, the Bank required, among other things, project pro forma, performance and payment bonds on the construction contract, and pre-sale of fifty percent of the units. The loan was closed September 5, 1984.

Construction commenced shortly after June 4, 1984, but soon fell behind schedule. There were construction deficiencies and, ultimately, the filing of mechanics liens by subcontractors and suppliers. On August 9, 1985, the Builder entered into an Option Purchase Agreement with the Developer for the Builder to purchase the project. Consideration for the option was $125,000 and the Builder's agreement to endorse the loan note when it came due on September 5, 1985, so that the Bank would renew the note. On November 18, 1985, when the project was incomplete and numerous craftsman deficiencies existed, the Builder abandoned construction and would not return, despite requests by the Surety.

On February 24, 1986, the Bank instituted a foreclosure action against the Developer, the Builder, and the Surety. The Builder filed a general denial to the allegations of the complaint. The Developer answered by way of general denial and cross-claimed against the Builder and the Surety for breach of contract. The Builder and the Surety filed an answer in which they denied the allegations of the cross-claim and counterclaimed against the Developer alleging breach of contract. The Surety impleaded Clary Architects, Inc., the Developer's architect. The foreclosure action was severed and in November of 1986, the Bank obtained a deficiency judgment against the Developer and the Builder in the amount of $394,742.80.

The contract claims were referred with finality to the Master, who awarded judgment as follows: (1) to the Developer, actual damages against the Builder and the Surety in the amount of $1,029,055.80; (2) to the Bank, actual damages against the Surety in the amount of $142,594.62; (3) dismissal with prejudice of the counterclaims and cross-claims of the Builder and the Surety; and (4) to the Developer, the Bank and Clary Architects, Inc., their costs. Included in the Developer's damage award were (a) a deficiency judgment of $394,742.80, and (b) lost profits of $382,600.00. The Builder and the Surety appealed, and the Court of Appeals affirmed the Master's order in South Carolina Federal Sav. Bank v. Thornton-Crosby Development Co., Inc., 303 S.C. 74, 399 S.E.2d 8 (Ct.App.1990). This review followed.

The Builder alleges that the Court of Appeals failed to apply the correct factors to determine whether lost profits are recoverable by a new business as set out in Drews Co. v. Ledwith-Wolfe Assoc., 296 S.C. 207, 371 S.E.2d 532 (1988).

In Drews, supra, this Court set out a three-prong test to determine whether lost profits may be...

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7 cases
  • Tomlinson v. Mixon, 4070.
    • United States
    • Court of Appeals of South Carolina
    • January 9, 2006
    ...of his bargain. South Carolina Fed. Sav. Bank v. Thornton-Crosby Dev. Co., 303 S.C. 74, 399 S.E.2d 8 (Ct.App.1990), aff'd, 310 S.C. 232, 423 S.E.2d 114 (1992). The proper measure of damages for breach of contract is the loss actually suffered by the contractee as the result of the breach. S......
  • R & G CONST., INC. v. LRTA
    • United States
    • Court of Appeals of South Carolina
    • December 4, 2000
    ...402 (1992); Kuznik v. Bees Ferry Assocs., 342 S.C. 579, 538 S.E.2d 15 (Ct.App.2000). See also South Carolina Fed. Sav. Bank v. Thornton-Crosby Dev. Co., 310 S.C. 232, 423 S.E.2d 114 (1992) (action seeking money damages for breach of contract is action at law). Our review of an action at law......
  • Monster Daddy, LLC v. Monster Cable Prods., Inc., Civil Action No. 6:10-1170-MGL
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • July 2, 2013
    ...profits lost by Monster Daddy as a direct and proximate result of the breach in this case. See South Carolina Federal Sav. Bank v. Thornton-Crosby Dev. Co., Inc., 423 S.E.2d 114, 115 (S.C. 1992). Next, the attorney's fees Monster Daddy seeks associated with the costs of this litigation, are......
  • Moore v. Moore, 3840.
    • United States
    • Court of Appeals of South Carolina
    • June 28, 2004
    ...155 (1973)). Reviewing the factors in Drews, the supreme court affirmed the master's findings in South Carolina Fed. Sav. Bank v. Thornton-Crosby Dev. Co., 310 S.C. 232, 423 S.E.2d 114 (1992), where the master awarded the developer of a proposed condominium complex lost profits. The master ......
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