A.V.A. Const. Corp. v. Palmetto Land Clearing, Inc., 1810

• Decision Date: 14 April 1992
• Docket Number: No. 1810,1810
• Parties: A.V.A. CONSTRUCTION CORPORATION, Appellant, v. PALMETTO LAND CLEARING, INC., and Cainhoy Landing Associates, a South Carolina Partnership, D.J. Jones, a Limited Partnership, Douglas J. Jones, Jr., general partner, and Stackpole-Hall, a Limited Partnership, R. Dauer Stackpole, general partner, as general partners, Defendants, of whom Cainhoy Landing Associates, a South Carolina Partnership, D.J. Jones, a Limited Partnership, Douglas J. Jones, Jr., general partner, and Stackpole-Hall, a Limited Partnership, R. Dauer Stackpole, general partner, as general partners, are Respondents. . Heard
• Court: South Carolina Court of Appeals

Page 317

418 S.E.2d 317

308 S.C. 377

A.V.A. CONSTRUCTION CORPORATION, Appellant, v. PALMETTO LAND CLEARING, INC., and Cainhoy Landing

Associates, a South Carolina Partnership, D.J. Jones, a

Limited Partnership, Douglas J. Jones, Jr., general partner,

and Stackpole-Hall, a Limited Partnership, R. Dauer

Stackpole, general partner, as general partners, Defendants,

of whom Cainhoy Landing Associates, a South Carolina

Partnership, D.J. Jones, a Limited Partnership, Douglas J.

Jones, Jr., general partner, and Stackpole-Hall, a Limited

Partnership, R. Dauer Stackpole, general partner, as general

partners, are Respondents.

No. 1810.

Court of Appeals of South Carolina.

Heard April 14, 1992.

Decided May 11, 1992.

Steven L. Smith and Joe S. Dusenbury, Jr., both of Smith & Collins, North Charleston, for appellant.

Cheryl D. Shoun and Robert L. Wylie, IV, both of Robinson, Wall & Hastie, Charleston, for respondents.

GOOLSBY, Judge:

A.V.A. Construction Corporation, a subcontractor, gave notice of a mechanic's lien against the property of Cainhoy Landing Associates when Cainhoy's general contractor, Palmetto Land Clearing, Inc., failed to pay A.V.A. for labor and materials furnished by A.V.A. The master held A.V.A. "failed to establish a valid lien against Cainhoy ... [because] ... Cainhoy ... ha[d] paid the general contractor ... the entire amount of the contract between Cainhoy ... and [the general contractor] prior to notice of the lien being given to Cainhoy ... by ... A.V.A. ...." In a subsequent order, the master also awarded Cainhoy attorney fees. A.V.A. appeals. The dispositive issue is whether a credit given a contractor for pre-existing debts of the contractor to the owner can constitute payment under S.C.Code Ann. § 29-5-40 (1991) ¹ where there is no evidence of either fraud or bad faith.

Cainhoy, a limited partnership composed of D.J. Jones, a limited partnership, Douglas J. Jones, Jr., Stackpole-Hall, a limited partnership, and R. Dauer Stackpole, owns a tract of land known as Cainhoy's Landing. Palmetto specializes in clearing and grading and in the construction of subdivisions. A.V.A. specializes in grading and paving.

After Cainhoy hired Palmetto to serve as its general contractor on a subdivision project, Palmetto subcontracted with A.V.A. to supply asphalt and to perform paving services within the subdivision.

After Palmetto failed to pay A.V.A. the amount owed it, A.V.A. notified Cainhoy of the furnishing of labor and materials and of the amount due it from Palmetto. A.V.A. also served a summons and complaint upon Cainhoy seeking to foreclose its mechanic's lien. Cainhoy defended, asserting that A.V.A.'s complaint should be dismissed because Cainhoy had paid Palmetto all sums due Palmetto on the contract before receiving A.V.A.'s notice.

Cainhoy's payments to Palmetto included, as the parties describe them, certain "trade-outs" between Cainhoy and Palmetto. These so-called "trade-outs" consisted of a credit given by Palmetto to Cainhoy in exchange for the cancellation of a like amount in debts owed by Palmetto to a Cainhoy partner.

The master held the "trade-outs" constituted payment under section 29-5-40. He also found that the "trade-outs," together with the payments made, resulted in a zero balance due from Cainhoy to Palmetto as of the date A.V.A. gave Cainhoy the notice required by section 29-5-40. The master accordingly held A.V.A. could not enforce a mechanic's lien against Cainhoy and awarded Cainhoy attorney fees as the prevailing party pursuant to S.C.Code Ann. § 29-5-20(a) (1991). ²

We affirm the master.

The statute in issue here does not prescribe a particular manner in which an owner may pay a contractor. Rather, it focuses on the "amount due" from the owner to the contractor "on the contract price." The "amount...