Swanson v. Stratos

• Decision Date: 13 May 2002
• Docket Number: No. 3487.,3487.
• Citation: 564 S.E.2d 117,350 S.C. 116
• Court: South Carolina Court of Appeals
• Parties: Stephen E. SWANSON, Respondent, v. John D. STRATOS and Milton D. Stratos, Both Individually and as Personal Representatives of the Estate of Demetros J. Stratos, Deceased; Delores M. Stratos; Lois E. Stephenson; Mary Griffin; and Debie Misoyianis, Defendants, Of whom, John D. Stratos, Individually and as Personal Representative of the Estate of Demetros J. Stratos, Deceased; Delores M. Stratos; Lois E. Stephenson; Mary Griffin; and Debie Misoyianis are, Appellants.

350 S.C. 116

564 S.E.2d 117

Stephen E. SWANSON, Respondent, v. John D. STRATOS and Milton D. Stratos, Both Individually and as Personal Representatives of the Estate of Demetros J. Stratos, Deceased; Delores M. Stratos; Lois E. Stephenson; Mary Griffin; and Debie Misoyianis, Defendants, Of whom, John D. Stratos, Individually and as Personal Representative of the Estate of Demetros J. Stratos, Deceased; Delores M. Stratos; Lois E. Stephenson; Mary Griffin; and Debie Misoyianis are, Appellants.

No. 3487.

Court of Appeals of South Carolina.

Submitted April 8, 2002.

Decided May 13, 2002.

Paul Daniel Schwartz, of David & Schwartz, of Charleston, for appellants.

Philip G. Clarke, III, of Bleecker & Clarke, of Charleston, for respondent.

HOWARD, J.:

Stephen Swanson sued John D. Stratos, individually and as personal representative of the estate of Demetros J. Stratos; Delores M. Stratos; Lois E. Stephenson; Mary Griffin; and Debie Misoyianis (collectively, "the Stratos family") for breach of express contract, breach of implied contract, and quantum meruit seeking to recover $31,800 in commission on a sale of timber.¹ The master awarded Swanson $3,800 dollars on his quantum meruit claim against the Stratos family. Swanson filed a motion to alter and amend the judgment and was awarded $1,342.92 in costs. The Stratos family also moved to alter and amend the judgment asking the master to vacate the award to Swanson and enter judgment for them and to award attorney's fees and costs under the South Carolina Frivolous Civil Proceedings Sanctions Act. The master denied the motion. The Stratos family appeals. We reverse in part and affirm in part.

FACTS AND PROCEDURAL HISTORY

In February 1996, John Stratos and Milton Stratos, as representatives for their father's estate, hired Swanson, a licensed forester, to inventory and appraise the value of timber on a 561 acre tract of land owned by the estate and located in Cordesville, South Carolina.

As he appraised the timber, Swanson noticed the presence of a red-cockaded woodpecker, an endangered species. Federal regulations require protection of this endangered species, which complicated the appraisal and future sale of the timber. On April 30, 1996, Swanson offered to market the timber to find a buyer at a suitable price, in return for which he was to receive a commission of ten percent of the gross proceeds of the sale, less the twenty-five hundred dollars he had already received for appraising the timber. Swanson informed the Stratos family about the endangered species and his ability to resolve the issue with regulatory agencies in order to sell the timber.

Although the Stratos family and Swanson came to an oral agreement on April 30, 1996, the agreement was not reduced to writing except in a letter written by Swanson to the Stratos family on November 11, 1996. The November 11 letter described the terms of the sale and the duties Swanson had undertaken in selling the timber as follows:

From March until our last meeting on November 8, 1996, I have done considerable work for the family in the following area: a number of meetings and phone calls with Westvaco and U.S. Fish & Wildlife Service biologists to resolve the Red-Cockaded Woodpecker issue; development of the Timber Sale Prospectus, continuing talks with prospective buyers in on-going marketing of the timber specified for sale in the Prospectus, marketing of the timber specified for sale in the Prospectus, work in progress on the Habitat Conservation Plan (H.C.P.) to enable you to sell timber on the 66 acre Block in 1997, and also three meetings with you as a group at Mrs. Stratos's house to keep all of you informed and to answer questions concerning the sale of timber. My fee of ten (10%) percent of the total proceeds from the Timber Sale covers my time in the above duties as well as the following. 1) continued marketing of sale to assure best price, 2) when sale is consummated, I will assist in the development of the Timber Sales Contract to insure [sic] your interests are protected, 3) [l]ogging supervision to insure [sic] contract compliance, full accounting of tonnage cut and hauled, 4) inspections as necessary to determine the extent of natural regeneration, 5) coordination with various state and federal agencies to secure cost-share funds for replanting whatever portion of tract is necessary, 6) supervision and coordination of site-prep and planting contract crews until acreage cut is productive again, 7) completion of [the] H.C.P. in order to get the go-ahead for the sale of timber on the 66 acre tract, 8) any other family meetings or meetings with U.S. Fish & Wildlife personnel to complete [the] H.C.P.

(emphasis added).

Between April 30 and November 11, Swanson compiled a sales prospectus to market the timber. Included in the prospectus was a sixty-six acre area designated a reserved area for the red-cockaded woodpecker. At trial, Swanson presented records indicating the time he spent creating the set-aside. In support of his quantum meruit claim at trial, Swanson testified that he charged $100 an hour for these services if not included in a commission sales contract.

Although Swanson received several offers to purchase and log the timber, all fell short of Swanson's suggested selling price, and he advised the Stratos family to wait until they received an acceptable offer. When no adequate bids were received, the Stratos family declined to sign a portion of Swanson's letter that would have extended the listing past November 11. Subsequently, a timber buyer for Elliott Sawmilling Company purchased the timber for $318,000 in January 1997, after reviewing the paperwork involving the set-aside arranged by Swanson during his listing contract. Elliot's buyer learned of the timber from a friend of John Stratos and had neither received Swanson's prospectus nor had any contact with Swanson concerning the proposed sale during the listing period.

On October 7, 1997, Swanson filed his complaint, alleging breach of contract, breach of implied contract, and quantum meruit causes of action. Swanson sought to obtain ten percent of the purchase price as his commission. The case was tried before a master-in-equity.

The master found an express contract was formed between the Stratos family and Swanson during the April 30 meeting and the terms of that contract were expressed in the November 11 letter. The master also found the contract terminated on November 11 and was not renewed. The master further found that Elliott Sawmilling relied upon Swanson's set-aside when purchasing the timber and awarded Swanson $3,800 in quantum meruit for his work.²

Swanson filed a motion to alter and amend the judgment and requested the award of court costs of $1,342.92. The Stratos family also filed a motion to alter and amend the judgment, asking the master to render judgment for them against Swanson and award them costs and attorney's fees under the Frivolous Civil Proceedings Sanctions Act. The master granted Swanson's motion and awarded costs of $1,342.92. The master denied the Stratos family's motions. The Stratos family appeals.

LAW/ANALYSIS

I. Quantum Meruit

The Stratos family argues the master erred when he awarded Swanson $3,800 in quantum meruit because the duties associated with the creation of the set-aside were included in the express contract. We agree.

To prevail on a quantum meruit claim the plaintiff must establish the following elements: 1) a benefit conferred by the plaintiff upon the defendant; 2) realization of that benefit by the defendant; and 3) retention of the benefit by the defendant under circumstances that make it inequitable for him to retain it without paying its value. Myrtle Beach Hosp. v. City of Myrtle Beach, 341 S.C. 1, 8-9, 532 S.E.2d 868, 872 (2000). If the tasks the plaintiff is seeking compensation for under a quantum meruit theory are encompassed within the terms of an express contract which has not been abandoned or rescinded, the plaintiff may not recover under quantum meruit. See 66 Am.Jur.2d Restitution and Implied Contracts § 81 (2001) ("[I]t is a defense to an action in quantum meruit that there is an express contract covering the issue of compensation for services or materials furnished."); cf. Strickland v. Coastal Design Assocs., 294 S.C. 421, 424, 365 S.E.2d 226, 228 (Ct.App.1987) ("The law is well settled in this nation that where an express contract has been rescinded or abandoned, one furnishing labor or materials in part performance may recover in quantum meruit unless the original contract remains in force."); Johnston v. Brown, 290 S.C. 141, 148, 348 S.E.2d 391, 395 (Ct.App.1986),rev'd on other grounds,292 S.C. 478, 357 S.E.2d 450 (1987) ("While a recovery may be had in quantum meruit for services fully performed under an express contract, the...