J & W Corporation v. Broad Creek Marina ( 2023 )

THE STATE OF SOUTH CAROLINA
In The Court of Appeals
J & W Corporation of Greenwood, Appellant,
v.
Broad Creek Marina of Hilton Head, LLC; Broad Creek
Marina Operations, LLC; Broad Creek Marina
Properties, LLC; Broad Creek Marina and Development,
LLC, Respondents.
Appellate Case No. 2020-000862
Appeal from Beaufort County
Marvin H. Dukes, III, Master-in-Equity
Opinion No. 6035
Heard May 4, 2023 – Filed November 15, 2023
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED
Thomas Calvin Taylor, of Law Offices of Thomas C.
Taylor, LLC, of Bluffton, for Appellant.
Ellis Reed-Hill Lesemann and Michelle Alyce Stewart,
both of Lesemann & Associates LLC, of Charleston, for
Respondents.
GEATHERS, J.: In this action, Appellant J & W Corporation of Greenwood
(J&W) appeals an order of Master-in-Equity resolving a dispute between J&W and
Respondents Broad Creek Marina of Hilton Head, LLC; Broad Creek Marina
Operations, LLC; Broad Creek Marina Properties, LLC; and Broad Creek Marina
and Development, LLC (collectively, "Broad Creek Marina"). J&W argues that the
master's errors include: (1) declining to issue a declaratory judgment for J&W in a
dispute over the use of a boat shed for J&W's office; (2) ordering J&W to accept an
Aqua Lodge houseboat as a "Floating Office"; (3) declining to award J&W nominal
damages for breach of contract; (4) declining to apply an equitable setoff to the
damages awarded to Broad Creek Marina because of the dispute over the boat
shed-office; (5) awarding damages and pre-judgment interest to Broad Creek Marina
for hurricane-related damage to some of the marina's docks; (6) declining to issue a
judgment declaring that a settlement agreement between the parties shifted
responsibility for dock damages and insurance coverage to Broad Creek Marina; and
(7) quashing a trial subpoena and awarding certain damages despite the subpoenaed
evidence's relevance to those damages. We affirm in part, reverse in part, and
remand for the entry of a judgment in compliance with this opinion.
FACTS/PROCEDURAL HISTORY
This case involves events that have taken place over a period of more than
thirty years. It revolves almost entirely around a marina in Beaufort County and a
barge service at the marina. The bitter disputes between the parties require us to go
into some detail about how the two sides ended up before this court.
A. Setting Up Broad Creek Marina
In the early 1980s, William "Wick" Scurry (Scurry) and his father bought the
Broad Creek Marina1 in Beaufort County. During the Scurrys' ownership of the
marina, the younger Scurry and a customer built a boat shed that would become
more significant to Scurry's life than perhaps he imagined. Eventually, the Broad
Creek Marina was sold to a man named Frank Ferrari, but Ferrari's fortunes reversed,
and his lender asked Scurry to return to manage the marina. 2 In return for his
agreement to do so, Scurry received a right of first refusal to purchase the property.
In 1993, Richard Freedman, a principal of Hilton Head Island Marina, L.P.,
which later became known as Broad Creek Marina of Hilton Head, LLC, became
interested in buying the marina. Scurry's company—J&W, which operated a ferry
1
For clarity, we will preface "Broad Creek Marina" with "the" when referring to the
property itself versus the collective Respondents.
2
Scurry's testimony is not always clear on when these events occurred. He candidly
testified that he did not remember precisely when Ferrari bought the marina.
and barge service from the marina to Daufuskie Island—exercised its right of first
refusal. J&W then assigned the purchase contract to Richard's business. 3
On September 23, 1993, the two parties signed an agreement (the Lease). It
was a 99-year lease under which J&W would pay $1 a year in "Base Rent." Other
various expenses that could be attributed to J&W's presence at the marina—its
utilities, the portion of the tax bill covering the leasehold, and the share of Broad
Creek Marina's insurance costs attributable to the leasehold—would be paid in
"Additional Rent."
Among the provisions of the lease was one labeled "Liability Insurance."
Under that provision, J&W was required to carry "insurance for personal property,
trade fixtures and property damage as well as environmental coverage and a public
liability policy." The policy had to name both J&W and Broad Creek Marina, and
it had to provide at least one million dollars in coverage, with annual adjustments
for inflation.
B. Tensions Build
Over roughly the next decade, the relationship between J&W and Broad Creek
Marina significantly deteriorated. Roger Freedman—Richard's brother—became
J&W's primary contact. 4 Contributing to the strain was the aftermath of the sinking
of J&W's floating store, which housed its operations. Scurry blamed the sinking on
his own failure to maintain it well. After the sinking, J&W relocated its operations
to a portion of the marina's future restaurant, which at that point served as an office.
To resolve their building grievances, and settle a lawsuit that had been filed,
the two parties signed a Release and Confidential Settlement Agreement (the
Settlement Agreement). The Settlement Agreement incorporated the lease and
stated that "the Parties specifically reaffirm and ratify the terms and conditions of
the Lease attached hereto and incorporated herein by reference, not specifically
modified by the terms of this document."
The Settlement Agreement provided that J&W would receive a floating store
to house its operations; that "if and only if" that was not possible, J&W would be
given space in a proposed dockmaster's house to be built at the marina; and that "if
3
The record does not reflect when Richard's business changed its name, but
hereinafter, we will refer to the business as Broad Creek Marina.
4
Roger Freedman indicated in a deposition read at trial that he bought out his
brother's interest in the business.
and only if" neither of those solutions were possible, J&W would maintain its space
at the marina office with the possibility of "relocat[ing] to a mutually agreeable
location of a size, kind and quality at least comparable to the existing space, and
such replacement space shall be located in the center of the commercial and retail
activity at the Marina." The Settlement Agreement also provided that:
J&W agrees to pay all common area charges as identified
in the Lease that come due and payable beginning January
2005. The formula for determining amounts due and
payable by the Parties for common area charges is attached
as Exhibit F. [Broad Creek Marina] agrees to waive any
and all previously accrued charges.
. . . [Broad Creek Marina] agrees to pay for all costs
related to the purchase and installation of new docks at the
Marina. J&W agrees to be responsible for all costs of dock
maintenance and repair for the Lease Property as
contemplated in the Lease. [Broad Creek Marina] agrees
to waive any and all previously accrued costs that would
be due and payable by J&W as contemplated by the
Lease[.] . . .
...
. . . Except as set forth, amended or modified herein, all
terms and conditions of the Lease remain in full force and
effect.
Exhibit F provided for J&W to pay $5,021.13 a year in additional costs. That
included a share of general liability and property insurance and property tax
payments, among other costs. For example, J&W was to pay 7.5 percent of the
general liability insurance, for $1,657.50 annually; 32 percent of the lot maintenance
costs, for $1,437.44 annually; a third of the real property insurance, for $155.76
annually; 7.5 percent of the real property insurance for docks and piers, for $155.62
annually; and a tenth of the property taxes, for $1,614.80 annually.
Around this time, Broad Creek Marina asked Scurry to "move into
temporarily, a house boat"; he agreed. However, the new boat also sank.
Meanwhile, the state's Office of Ocean and Coastal Resource Management (OCRM)
issued permit no. 2005-1W-384-P, which
authoriz[ed] the requested dockmaster office as well as the
floating office associated with the barge and ferry
service. . . . The floating office will be 28' by 55' and will
house the business operations associated with a transport
business that transport[s] materials and equipment to and
from Daufuskie Island.[ 5]
C. To the Boat Shed
It was in the wake of the sinking of J&W's second waterborne office that the
party's differences led to the current legal action. At some point in 2008 or 2009—
accounts differ—Scurry's business was moved to the boat shed that he and the
previous customer had built.6 According to Scurry, J&W was moved into the shed
around 2008, though he couldn't recall "the exact day." J&W found the settings
unsatisfactory. It had no HVAC system, and resembled, in Scurry's estimation,
"[s]omething like out of a Third World Country or something." There were roaches,
rats, insects, and—at one point—a copperhead that Scurry discovered in his office.
Scurry testified that because of the office dispute, J&W "just quit paying fees."
Scurry testified that he stopped paying utilities somewhere between 2008 and 2010.
He also stopped paying property insurance costs. Business records and testimony at
trial indicated that as late as April 2008, J&W's account with Broad Creek Marina
had a zero balance.
At least one employee of Broad Creek Marina played down the conflict over
the move to the boat shed. During a deposition partially read at trial, Nate Jones—
the general manager at Broad Creek Marina—recalled that he did not "remember a
huge dumpster fire blowing up . . . in conversations that, you know, they would have
been heated at that time if the situation was disagreeable." He testified again during
trial that he did not recall the relocating of the office "being a massive problem."
Roger Freedman agreed that the arrangement "was not in keeping with what [he]
promised under the terms of the settlement agreement, but it was going to be
temporary[.]" At the same time, Freedman testified that allowing J&W to stay in
the boat shed was "generous" given the difficulties Broad Creek Marina was having
with J&W.
During the trial, employees of Broad Creek Marina also disagreed with Scurry
over the timing of the relocation of J&W's operations to the boat shed. Robbin
5
The dockhouse was never built. Roger Freedman indicated that it was not
"practical" for Broad Creek Marina and would have cost $150,000 to $200,000.
6
The building was already housing a venture called "Water Dog Kayaking."
Rachels, the accounting manager for Broad Creek Marina, indicated that she was
already working at the marina by the time J&W's operations were moved, and her
employment began in February 2009. Jones, the marina's general manager, likewise
said the move took place that year, and specifically in autumn. 7
On July 6, 2010, J&W's counsel wrote a letter to Roger Freedman. Atop a
lengthy list of questions and complaints was the location of J&W's office.
Mr. Scurry has worked with you for several years patiently
awaiting Broad Creek Marina's fulfillment of this lease
requirement, but can wait no longer. The "temporary"
quarters that have been provided are not permitted, are at
variance with the Town Code, are not acceptable for
business purposes and are plainly deficient under the
requirements of the Lease and Settlement Agreement.
Sixteen days later—after receiving an email response from Freedman—J&W's
counsel wrote in a follow-up letter that J&W wanted to "focus our joint efforts on
addressing the most important issue, that of the office space for J & W."
On May 9, 2014, J&W's counsel sent a letter to counsel for Broad Creek
Marina, referencing a Beaufort County action with the number 2010-CP-07-5068.
In the letter, counsel maintained
J & W's continuing contention that the damages it is
suffering as a result of your client's failure to provide
J & W with the office space called for under the Lease
Agreement and the Settlement Agreement[] exceed the
total amount of money that J & W would owe under the
agreements . . . .
7
At points, counsel for J&W appears to have conceded that it is at least possible that
the move took place in 2009. For example, during a July 19, 2019 hearing, counsel
stated that "it's undisputed that for over a ten-year period between 2009 until 2019,
despite written notice to Broad Creek Marina that the office we were in was not
within code and was not properly permitted[,] J&W sat in that office space for the
ten years without anything new, ultimately, leading up to the trial." (We have altered
the transcript to combine two sentences that were likely spoken as one.) During a
February 11, 2020 hearing, counsel said "the move into the boat shed was made in
about 2008 or 2009."
However, in a good-faith effort to work with Broad Creek
Marina as we move into the busy summer season, J & W
has instructed me to tender to Broad Creek Marina,
through you as its counsel, the enclosed check . . . in the
amount of $20,537.67[ 8] as J & W's "tax payments" for the
years 2008 through 2013.
Counsel also requested documentation for other expenses.
D. Lawsuits and Hurricanes
J&W filed an amended complaint in this action on March 28, 2016. 9 J&W
asserted multiple claims, including those at issue in this appeal: breach of contract,
and a declaratory judgment related to the office controversy. In its amended answer
and counterclaims filed September 14, 2017, Broad Creek Marina asserted claims
for breach of contract, specific performance, and negligence.
In 2016, with the legal fight underway, Hurricane Matthew threatened the
South Carolina coast—and the marina. As the storm approached, Jones asked an
employee of J&W to move the company's boats to avoid any damage to the docks
that might result from the storm. The employee responded that J&W would not.
Scurry testified that he believed his boats were "much better off where they [were]
than anywhere you could put them" during a storm. He also said that there were
other boats in the marina before the storm made landfall, something Jones confirmed
during his testimony. The hurricane damaged some of the docks at the marina. Jones
said he believed that "the fact that [J&W's] boat was tied up to that section of dock
that was damaged in the storm [was] completely why that section of dock was torn
up." Jones further testified that J&W's general manager acknowledged J&W's
responsibility for some of the damage. However, on cross-examination, Jones
conceded that he was not at the marina when Matthew struck, and that "a
combination" of "wave action, wind action, and boat action" likely caused the
damage.
In all, repairing damage to the marina from the storm cost Broad Creek Marina
at least $54,398. Broad Creek Marina did not file a claim for the damages against
8
A copy of the check is also in the record. Freedman recalled this as "a small amount
of money."
9
We have been unable to locate a precise date when the complaint in this matter was
first filed. Given that the second complaint bears a caption with the number
2015-CP-07-01704, it is likely that it was filed in 2015.
its property insurance. Jones's testimony showed some confusion on his part as to
whether the deductible for the losses was $40,000 or $50,000. An insurance
company employee testified that the deductible for a hurricane would have been
$40,000. Counsel for Broad Creek Marina also conceded at a later hearing that the
deductible on the policy was $40,000.
Following the storm, on October 28, 2016, a letter on J&W letterhead was
sent to Joe Gossage, an adjuster for North American Specialty Insurance Company.
The letter, which went out over Scurry's signature, stated: "Under the terms of both
agreements [with Broad Creek Marina], J&W is responsible for repairs to its
leasehold property in the event of damage." The letter also stated:
J & W has been advised by the General Manager of Broad
Creek Marina that the docks . . . were damaged by the
storm, and Broad Creek Marina is making demand upon
J & W to stand ready to respond in damages. Thus, we are
hereby calling upon North American Specialty Insurance
Company to immediately undertake whatever
investigation you deem necessary to evaluate the damage,
so that you may be in a position to provide the coverage
J & W purchased under its policy.
Scurry nonetheless testified at trial that he did not believe J&W was responsible for
such damage. During cross-examination, Scurry said he did not recall the letter.
Later, under questioning from his own counsel, he claimed to remember that the
letter was part of an effort to help Broad Creek Marina.
By 2017, J&W revenues had increased over the previous seven years from
$1.9 million to $3.6 million. However, Scurry testified at trial that the increase in
revenues might have come from sources other than his ferry and barge operations.
Scurry testified that "the [number of] people I am moving . . . out of Broad Creek[]
has dropped quite a bit."
E. Heading to Trial
In early 2019, apparently in preparation for trial, J&W's counsel subpoenaed
building officials for the Town of Hilton Head. That led to the officials sending
Broad Creek Marina a "Notice of Violation" regarding the boat shed and a floating
building for another marina venture. The notice gave Broad Creek Marina "60 days
from the date of this letter to relocate all occupants and their belongings, and to
acquire a building permit to change the occupancy of the two buildings." 10
J&W's counsel also subpoenaed Jones and Rachels on May 8, 2019, asking
both of them to produce certain documents and appear a week later. Broad Creek
Marina moved to quash those subpoenas on May 10. During Rachels's testimony,
the court granted the motion to quash, at least as to her subpoena.
The trial focused on the two sides' differing views of what had happened at
the marina over nearly three decades—from the meanings of the Lease and the
Settlement Agreement to the assorted disputes that had flared over the years. The
primary issues, though, concerned J&W's office, its insurance, and which party was
responsible for repairing the docks when they were damaged.
Scurry testified that J&W had "apparently" not added Broad Creek Marina to
its insurance policy, as required by the Settlement Agreement. Scurry also testified
that he had "never even thought about" whether he increased J&W's liability
insurance for inflation, as required by the Settlement Agreement. As to whether he
was required to insure the docks, Scurry said he had been told that he could not
obtain insurance on the docks if they were already insured by Broad Creek Marina.
Ed Barteet, who worked for Strickland Marina Insurance, said he could not
remember discussing the issue with Scurry, but would have said "if you don't own
the property, you can't insure it, unless there's some instrument between the landlord
and the tenant that would require you to insure it."
Evidence at trial also indicated that J&W had been billed more than the dollar
amount provided for on Exhibit F for at least one expense. According to a deposition
read at trial, Rachels conceded that J&W's monthly share of the lot maintenance
costs under Exhibit F should have been approximately $119.79, instead of the
$133.12 that Broad Creek Marina had sought. Rachels explained that she "just
continued billing [J&W] what was being billed when I started." Rachels gave similar
testimony at trial, adding that she wanted "to point out that the [overall] lot
maintenance fee of $4,492 a year has greatly increased since 2004." She also
testified that, following the deposition in January, "I have not gone back and changed
the amount billed each month. We have continued to bill the incorrect amount." She
said she was waiting for the results of the trial before doing so. On redirect, with
assistance from Broad Creek Marina's counsel, she testified that if current wage
10
Christopher Yates, the building official for the town, testified that Broad Creek
Marina contacted his office "[v]ery shortly" after the notice was sent. "Within a
week," he added.
conditions were used to calculate the dock maintenance fee and J&W was charged
the same proportion of those costs, the company would now be charged $144.21 a
month. As a result, she then said she did not believe she had "wrongfully
overbill[ed]" J&W.
Rachels also explained how she figured out the insurance payments that J&W
owed Broad Creek Marina. Rachels said she would request a spreadsheet from
Broad Creek Marina's insurance agency indicating how much of the coverage was
devoted to docks and piers—of which J&W was required by the Settlement
Agreement to pay 7.5 percent. Rachels conceded the spreadsheet was not included
in the evidence produced by Broad Creek Marina at trial but offered to J&W's
counsel, "I can get it for you." Rachels appeared to concede that during her January
deposition, she had promised to provide—in the words of J&W's counsel—"the
backup documentation with the policies from which we could review it." 11
F. Orders and Aftermath
Following the trial, the master issued an interim order dealing with the
location of J&W's office on May 29. The master found he needed to address that
issue quickly because of the notice of violation from the Town of Hilton Head. The
master ordered a "temporary portable rental office" to be set up for J&W while Broad
Creek Marina took "all reasonable steps to permit and acquire a new floating office
with at least 300 square feet of commercially usable space and at least a 20-year
anticipated service life" for J&W's permanent office. The master also ordered the
new office to be placed at a location where it would presumably sit on the water.
J&W filed a motion to amend or alter the interim order on June 6, objecting
to the suggestion in the order that J&W would have to replace the permanent floating
office if and when it became unusable.
On June 28, 2019, counsel for J&W sent a letter to counsel for Broad Creek
Marina alerting the latter that he had filed a motion under Rule 59(e), SCRCP,
"because we do not believe that a relatively short '20-year anticipated service life'
comports with the letter or spirit of what [Broad Creek Marina] is required to provide
11
Counsel for J&W also contended to the master that Rachels had offered similar
assistance during the January deposition. We are not sure that the deposition
testimony read into the record clearly supports that. During the deposition, Rachels
offered to provide some additional records, but it appears from our reading that it
could have been related but different records.
J & W under the terms of the original Lease Agreement or the [Settlement
Agreement]." The Master held a hearing on July 19.12
Meanwhile, work on setting up a temporary office went ahead. Jones testified
at a hearing that his efforts to find a suitable temporary office consumed "two, three
days [of work] total if you added all the time up plus going over there, supervising
the installation, the utility installations, the permitting, et cetera." By September 10,
2019, J&W was moving into its temporary office. Around the same time, according
to a letter from J&W's counsel, J&W once again began paying its share of the
common costs of the marina.
There was also movement on the permanent replacement. On August 10,
2019, Scurry sent Nate Jones an email rejecting the proposed office, an "Aqua
Lodge."
Unfortunately, I don't think it will work for us, for several
reasons. The fiberglass catamaran pontoons, much like
the bathrooms you have on the dock, are not nearly stable
enough for the movement in an office situation. The flat
roof has No pitch at all and really like a camper will
eventually leak. I called the manufacturer of the boat and
he informed me the pontoons only had a limited year
warranty. As you know our settlement agreement requires
a minimum of a 20[-]year life for the building[.] I would
again offer my original suggestion which is to put the
building on a steel barge.
On September 26, 2019, Broad Creek Marina moved to enforce or alter the
interim order and require J&W to use the Aqua Lodge as its permanent office. It
attached a statement by Dirk Wiley, the president of Catamaran Cruisers, Inc., in
which he specifically disclaimed offering a guarantee of any kind, 13 but said that
"when properly maintained, Aqua Lodges can remain in service for twenty (20)
12
We have been unable to locate an order disposing of this motion in the record.
However, given subsequent events, we can infer that the master did not substantively
alter or amend his order.
13
Broad Creek Marina's counsel said he "wrote" some of the non-warranty language
out of a fear that J&W would try to argue that a warranty was required by the
Master's order.
years or longer." 14 On November 8, J&W moved for additional discovery related to
the craft.
At a hearing on November 19, Jones testified about Broad Creek Marina's
efforts to comply with the judge's interim order. According to Jones, the structure
that Broad Creek Marina settled on for J&W's permanent office—one that sits on
fiberglass pontoons—was "very sturdy." Jones also testified that the materials and
design of the vessel would allow for easy, on-site maintenance, which would help
the office survive for at least 20 years. And it could be relocated if a hurricane
approached. Jones also said that after receiving Scurry's August 10 email, he
concluded that a court order would be needed to make J&W "accept any solution."
Scurry countered in his testimony at the hearing that the new office would
rock too much. He repeated his contention that what made "the most sense was to
build [the office] on a steel barge." Scurry also questioned whether the structure
would last for 20 years.
On November 25, 2019—in what is perhaps the first "Order on Floating
Office" issued in South Carolina history—the master approved Broad Creek
Marina's choice of building.
On January 9, 2020, the Master-in-Equity issued his final order and judgment
in the case. As a general matter, the master found for Broad Creek Marina on the
remaining issues, with the exception of its claim for negligence. The master awarded
Broad Creek Marina $112,428.40. On May 4, the master denied J&W's motion to
alter or amend. This appeal followed, but did not slow down the parties' legal
maneuvers.
On June 17, 2020, in opposition to J&W's petition for a writ of supersedeas,
Broad Creek Marina noted that J&W "has not only refused to pay the judgment, but
has also refused to pay $14,004.60 in additional charges that have come due under
the Lease since the date of the trial." (Emphasis in original). As an exhibit to the
motion, Broad Creek Marina enclosed a $119.79 check from J&W dated October
22, 2019, and a check in the same amount dated November 13.
14
Wiley also helpfully noted in the statement that the company's "exclusive 'three
deck' construction means the cabin walls are on the outside of the floor and the cabin
deck is separated from both the front and rear decks . . . . The result is a sealed
seamless cabin with maximum strength and weather tightness."
On April 21, 2023, this court received Broad Creek Marina's Partial Motion
to Dismiss Appeal Based on Mootness. In it, Broad Creek Marina contended that a
portion of J&W's argument concerning the second issue on appeal is now moot. On
May 1, we received J&W's return to this motion.
ISSUES ON APPEAL
I. Did the master err by declining to enter a declaratory judgment for J&W based
on the dispute over housing the business in the boat shed?
II. Did the master err in ordering J&W to accept the Aqua Lodge as its "floating
office"?
III. Did the master err in not awarding J&W nominal damages on its breach of
contract claim?
IV. Did the master err in not providing an equitable setoff to J&W based on the
"temporary" office assignment?
V. Did the master err in finding that J&W was responsible for the damage to the
docks and pre-judgment interest?
VI. Did the master err by declining to issue a declaratory judgment finding that
the Settlement Agreement supplemented and amended the lease agreement to
shift responsibility for the insurance and the dock damage to Broad Creek
Marina?
VII. Did the master err by quashing the subpoena for Broad Creek Marina's
bookkeeper and awarding a portion of the final damages?
STANDARD OF REVIEW
Because this case involves an appeal on a combination of legal and equitable
claims, our standard of review will vary with the issues. See S.C. Dep't of Transp.
v. M & T Enters. of Mt. Pleasant, LLC, 379 S.C. 645, 654, 667 S.E.2d 7, 12 (Ct.
App. 2008) ("[A] case with both legal and equitable issues presents a divided scope
of review."). "When legal and equitable actions are maintained in one suit, each
retains its own identity as legal or equitable for purposes of the applicable standard
of review on appeal." Consignment Sales, LLC v. Tucker Oil Co., 391 S.C. 266,
270, 705 S.E.2d 73, 75 (Ct. App. 2010) (quoting Corley v. Ott, 326 S.C. 89, 92 n.1,
485 S.E.2d 97, 99 n.1 (1997)).
In relation to any of the rulings that directly implicate a breach of either the
Lease or the Settlement Agreement, this court applies the standard of review for
actions at law tried without a jury because "[a]n action for breach of contract is an
action at law." Consignment Sales, LLC, 391 S.C. at 270, 705 S.E.2d at 76 (quoting
Electro Lab of Aiken, Inc. v. Sharp Constr. Co. of Sumter, Inc., 357 S.C. 363, 367,
593 S.E.2d 170, 172 (Ct. App. 2004)).
In an action at law, on appeal of a case tried without a jury,
the appellate court's standard of review extends only to the
correction of errors of law. The trial judge's findings of
fact will not be disturbed upon appeal unless found to be
without evidence which reasonably supports the judge's
findings.
Id. at 271, 705 S.E.2d at 76 (citation omitted) (quoting Electro Lab of Aiken, Inc.,
357 S.C. at 367, 593 S.E.2d at 172)).
At the same time, some contractual claims are reviewed under the standard of
review for equity. For example, "[a]n action for specific performance is one in
equity." Campbell v. Carr, 361 S.C. 258, 262, 603 S.E.2d 625, 627 (Ct. App. 2004).
See also Ingram v. Kasey's Assocs., 340 S.C. 98, 105, 531 S.E.2d 287, 290 (2000).
In equity actions[,] an appellate court can review the
record and make findings based on its view of the
preponderance of the evidence. However, this [c]ourt is
not required to disregard the findings of the trial judge who
saw and heard the witnesses and was in a better position
to judge their credibility.
Id. at 105, 531 S.E.2d at 290–91 (citations omitted).
Further, our standard of review for a declaratory judgment is based on the
issue raised by the request for the judgment. See Consignment Sales, LLC, 391 S.C.
at 273–74, 705 S.E.2d at 77 ("In order to determine the appropriate standard of
review to apply in an appeal from a declaratory judgment action, this court must look
to the nature of the underlying action."); see also Bundy v. Shirley, 412 S.C. 292,
301, 772 S.E.2d 163, 168 (2015) ("Declaratory judgments are neither legal nor
equitable. The standard of review for a declaratory judgment action is, therefore,
determined by the nature of the underlying issue." (citations omitted)).
These distinctions must be maintained even at the finest levels of a case. See
Bundy, 412 S.C. at 302, 772 S.E.2d at 168–69 (finding court should review the
existence of an easement under the any-evidence standard, and the "extent of a grant
of an easement" under equitable standards). As a result, we will address the standard
of review in our discussion of each issue when it is necessary.
LAW/ANALYSIS
I. THE BOAT SHED (J&W's Issues I, III, and IV)15
J&W contends the master made errors in three aspects of his order regarding
the movement of its operations to the boat shed. We take each one in turn. In the
end, we affirm on the declaratory judgment action and on equitable setoff, but
reverse on the issue of nominal damages.
A. Declaratory Judgment
J&W argues that the master should have issued a declaratory judgment based
on evidence that Broad Creek Marina "had, for at least ten (10) years, refused to
provide [J&W] with a properly permitted, commercially reasonable office despite
repeated demands and that [J&W] was entitled to such office space."
We find this argument is moot. The relevant paragraph of J&W's amended
complaint "seeks a declaratory judgment that . . . Broad Creek Marina must provide
appropriate office space to J & W as agreed upon in the [Settlement Agreement],
with a reasonable time period of no more than 90 days from this [c]ourt's order."
Based on the record before us, Broad Creek Marina has already been required to do
that by the master's "Order on Floating Office." And statements of counsel and
documents filed with this court since then suggest the same. See Affidavit of Ellis
R. Lesemann, Esq., in Support of Respondent's Partial Motion to Dismiss Appeal
Based on Mootness, at 2 ("[A] new tenant . . . has signed a [sublease with J&W] and
is occupying the floating office.").16
A moot case exists where a judgment rendered by the court
will have no practical legal effect upon an existing
controversy because an intervening event renders any
grant of effectual relief impossible for the reviewing court.
15
To clarify the issues, we have consolidated J&W's challenges to the master's ruling
based on the factual and legal underpinnings of those claims.
16
Lesemann's affidavit was filed in support of a motion to dismiss a different issue,
but the information is still relevant to this one.
If there is no actual controversy, this [c]ourt will not
decide moot or academic questions.
Sloan v. Friends of Hunley, Inc. (Friends I), 369 S.C. 20, 26, 630 S.E.2d 474, 477
(2006) (citation omitted). Because the floating office has already been provided—
and is now permitted—there is no reason for this court to order the same action as
relief.
In apparent anticipation of any mootness argument, J&W contends in its brief
that this court should address the issue to help the master determine which party is
the prevailing party for the purposes of an award of attorney's fees. We believe this
may be a failed attempt to invoke one of the three grounds our state courts have
recognized as a reason to proceed to the merits on a moot case—that "if a decision
by the trial court may affect future events, or have collateral consequences for the
parties, an appeal from that decision is not moot, even though the appellate court
cannot give effective relief in the present case." Sloan v. Greenville County, 380
S.C. 528, 535, 670 S.E.2d 663, 667 (Ct. App. 2009) (quoting Curtis v. State, 345
S.C. 557, 568, 549 S.E.2d 591, 596 (2001)). 17
We see at least three reasons to decline this invitation. First, as our courts
have noted, "[t]he utilization of an exception under the mootness doctrine is flexible
and discretionary pursuant to South Carolina jurisprudence, not a mechanical rule
that is automatically invoked." Id. at 535, 670 S.E.2d at 667. Second, a judgment
on attorney's fees is not the kind of collateral consequence that the exception
contemplates. See 5 Am. Jur. 2d Appellate Review § 561 (May 2023 update)
(collecting cases). Finally, South Carolina law provides that the master can and
should take into account the outcome of the office issue when determining which
party is the prevailing party for the purposes of attorney's fees, regardless of how
that outcome was achieved. See Sloan v. Friends of Hunley, Inc. (Friends II), 393
S.C. 152, 155–59; 711 S.E.2d 895, 896–98 (2011) (holding non-profit subject to
Freedom of Information Act could still be forced to pay attorney's fees when it
provided requested information before the conclusion of litigation); id. at 157, 711
S.E.2d at 897 ("When a public body frustrates a citizen's FOIA request to the extent
17
We do not believe the other two reasons most often invoked by our courts for
substantively addressing a moot claim—(1) whether "the issue raised is capable of
repetition but generally will evade review" or (2) addressing "questions of
imperative and manifest urgency to establish a rule for future conduct in matters of
important public interest"—are at play here. See Sloan v. Greenville County, 380
S.C. at 535, 670 S.E.2d at 667 (listing exceptions).
that the citizen must seek relief in the courts and incur litigation costs, the public
body should not be able to preclude prevailing party status to the citizen by
producing the documents after litigation is filed."). 18 Therefore, it is unnecessary to
address the issue's merits for the sole purpose of determining prevailing party status.
Because this argument is moot, we will not reach the merits.
B. Nominal Damages for Breach of Contract
J&W argues that the master should have provided nominal damages in
recognition of the time that its operations were located in the boat shed. We agree.
Whether nominal damages should have been granted to J&W is a decision
regarding the alleged breach of the Lease by Broad Creek Marina; therefore, it is an
action at law. See Bluffton Towne Ctr., LLC v. Gilleland-Prince, 412 S.C. 554, 562,
772 S.E.2d 882, 887 (Ct. App. 2015) ("A lease agreement is a contract, and an action
to construe a contract is an action at law." (quoting Middleton v. Eubank, 388 S.C.
8, 14, 694 S.E.2d 31, 34 (Ct. App. 2010))). As a result, we review it under an
any-evidence standard. "In an action at law, tried without a jury, the trial court's
findings of fact will not be disturbed unless found to be without evidence which
reasonably supports the court's findings." Duncan v. Little, 384 S.C. 420, 425, 682
S.E.2d 788, 790 (2009) (quoting Stanley v. Atl. Title Ins. Co., 377 S.C. 405, 409, 661
S.E.2d 62, 64 (2008)). "Where a contract is unambiguous, the matter becomes one
of law and the parties' intent as clearly set forth in their agreement must be given
effect. Conversely, where a contract is ambiguous, the fact finder must ascertain the
parties' intentions from the evidence presented." Id. at 424–25, 682 S.E.2d at 790(citation omitted).
"The elements for breach of contract are the existence of the contract, its
breach, and the damages caused by such breach." Branche Builders, Inc. v. Coggins,
386 S.C. 43, 48, 686 S.E.2d 200, 202 (Ct. App. 2009).
18
There are additional potential complications as to the extent of J&W's recovery, if
any, under this doctrine. Compare Friends II, 393 S.C. at 158–59, 711 S.E.2d at 898(finding that court "constrained to reverse the award of fees beyond the time [the
non-profit] produced the requested documents" because of previous rulings), with
Sloan v. S.C. Dep't of Revenue, 409 S.C. 551, 555 n.5, 762 S.E.2d 687, 689 n.5
(2014) (allowing post-production fees to be awarded because of lack of similar
concerns). However, we believe those issues are properly handled in an appeal from
any award of attorney's fees.
Clearly, there was a contract in the form of the Lease and the Settlement
Agreement. The question here is one of breach and damages.
As to breach, we disagree with the master's decision that any office space of
the required square footage was enough to meet Broad Creek Marina's obligations
to J&W. Even Roger Freedman, in his testimony at trial, rejected the idea that Broad
Creek Marina could have lived up to the Lease by providing a tree house to J&W.
By the same logic, we do not think that Broad Creek Marina could place J&W in a
dilapidated building, then require J&W to fix it up. Instead, the language requiring
J&W to keep its property "in good working condition and repair, neat and clean"
clearly contemplated J&W maintaining its leasehold property after a suitable
property had been provided.
Beyond that, though, the Settlement Agreement lists three places where J&W
could be relocated: (1) the floating office; (2) the dockhouse; or (3) a place mutually
agreeable to the two parties. None of those conditions were met by the boat shed.
There is no evidence in the record before us to support the master's finding to the
contrary. 19
Additionally, under the terms of the Lease, the fact that J&W had not paid all
of the rent and other charges due to Broad Creek Marina cannot justify the decision
to place J&W in a less desirable space. The Lease is clear: "Landlord shall have no
right to eject Tenant or to terminate this Lease. Landlord's sole remedy shall be to
obtain a money judgment against Tenant, and if the judgment remains unpaid,
Landlord can execute on the same." (Emphases added).
As a result, we find that Broad Creek Marina breached the Lease with J&W
when it relocated J&W's operations to the boat shed. That brings us to the question
of whether the master should have awarded nominal damages because of that breach.
The right to nominal damages emerges when a right is violated, regardless of
whether general damages can be proven. See Bergstrom v. Palmetto Health All.,
358 S.C. 388, 397, 596 S.E.2d 42, 46 (2004) ("A cause of action accrues at the
moment when the plaintiff has a legal right to sue on it. The law presumes at least
nominal damages at that point. The fact that substantial damages did not occur until
later is immaterial to determining when the action accrued or arose.") (quoting
19
We acknowledge that at various points during their testimony, Broad Creek
Marina's employees downplayed the severity of the disagreement over the office
space. However, this is not evidence that J&W agreed to operate out of the space,
and the master does not refer to this testimony in his final order.
Stephens v. Draffin, 327 S.C. 1, 4–5, 488 S.E.2d 307, 309 (1997)); Grooms v. Med.
Soc. of S.C., 298 S.C. 399, 402, 380 S.E.2d 855, 857 (Ct. App. 1989) ("The law
presumes the existence of at least nominal damages for the violation or infringement
of a legal right.").
For example, in 56 Leinbach Investors, LLC v. Magnolia Paradigm, Inc., this
court found that a lessee could recover nominal damages when both parties breached
a lease. 411 S.C. 466, 478–79, 769 S.E.2d 242, 249 (Ct. App. 2014). In that case,
the lessee had attempted to abate its rent after the property's owner subsequently
leased out a portion of the same lot for a communications tower. Id. at 470–71, 769
S.E.2d at 245. The court agreed with the lessor that the lessee could not abate its
rent under the facts of the case, and that the failure to pay the full rent constituted
breach. Id. at 477, 769 S.E.2d at 248. The court found that the lessor had also
breached but the lessee's "proof as to damages was only speculative and does not
support an award of actual damages." Id. As a result, the court found the lessee was
"entitled to nominal damages for [the lessor's] breach." Id. at 478–79, 769 S.E.2d at
249.20
Indeed, requiring a party to "prove" the amount of nominal damages is a legal
oxymoron. See 22 Am. Jur. 2d Damages § 8 (May 2023 update) ("The term 'nominal
damages' describes two types of awards: (1) those damages recoverable where a
legal right is to be vindicated against an invasion that has produced no actual, present
loss of any kind; and (2) the very different allowance made when actual loss or injury
is shown, but the plaintiff fails to prove the amount of damages." (footnote omitted));
id. at § 9 ("Only where the jury concludes that the sole injury that the plaintiff
suffered was the deprivation of his or her rights without any physical, emotional, or
financial damages or is unable to compute the monetary damages except by
engaging in pure speculation and guessing should it award nominal damages.
Nominal damages should be minimal awards for technical violations of legal rights
when no actual damages are sustained, or no actual damages have been proven."
(footnote omitted) (emphases added)); id. ("Nominal damages are appropriate only
when plaintiffs are unable to prove any amount of damages and are not properly
awarded when a plaintiff has established a quantifiable loss of revenue."); but see
Uzuegbunam v. Preczewski, 141 S. Ct. 792, 800 (2021) ("Nominal damages are not
20
There is at least one distinction between 56 Leinbach Investors, LLC and our case.
In 56 Leinbach Investors, LLC, the lessor had claimed that the lessee "suffered only
nominal damages" as opposed to damages that would have given it the right to abate.
Id. at 470, 769 S.E.2d at 244. However, this distinction does not change whether the
lessee in that case—or this one—could collect nominal damages.
a consolation prize for the plaintiff who pleads, but fails to prove, compensatory
damages. They are instead the damages awarded by default until the plaintiff
establishes entitlement to some other form of damages, such as compensatory or
statutory damages.").
Here, J&W suffered the loss of its right to an office that met the terms of the
Lease. That entitled J&W to nominal damages. As a result, we reverse and remand
to the master for his entry of a judgment for nominal damages on behalf of J&W.
C. Equitable Setoff for Location in Boat Shed
J&W argues that the master erred by not finding it was entitled to an equitable
setoff because of the time it spent using the boat shed as an office. We disagree.
First, a procedural note: We reject Broad Creek Marina's contention that this
portion of J&W's argument to this court is barred by the two-issue rule. See Jones
v. Lott, 387 S.C. 339, 346, 692 S.E.2d 900, 903 (2010) ("Under the two[-]issue rule,
where a decision is based on more than one ground, the appellate court will affirm
unless the appellant appeals all grounds because the unappealed ground will become
the law of the case."), abrogated on other grounds by Repko v. Cnty. of Georgetown,
424 S.C. 494, 818 S.E.2d 743 (2018). Broad Creek Marina argues that because J&W
did not specifically appeal the judgment for Broad Creek Marina on a
breach-of-contract claim, this appeal is not properly before us.
That cuts against the entire idea of equitable setoff, which is rooted in the idea
that valid damages can be offset to the extent that the party being awarded damages
is also responsible for damages to the other party. See 20 Am. Jur. 2d Counterclaim,
Recoupment, Etc. § 6 ("The right to setoff does not operate as a denial of the
plaintiff's claim, but rather allows the defendant to set off the debt that the plaintiff
owes the defendant against the plaintiff's claim against the defendant.") (May 2023
update); see also id. at § 5 ("Recoupment rests upon the principle that it is just and
equitable to settle in one action all claims growing out of the same contract or
transaction; the object of the plea is to rebate or recoup, in whole or part, the claim
sued on."). Therefore, an appeal of the denial of equitable setoff does not require an
appeal of the underlying judgment. Equitable setoff cannot exist without a valid
judgment to set off. If there were no breach of contract judgment for Broad Creek
Marina, J&W would not need to argue for equitable setoff at all.
Moving to the merits, we evaluate this claim under a more flexible standard
of review. "In equity actions[,] an appellate court can review the record and make
findings based on its view of the preponderance of the evidence." Ingram v. Kasey's
Assocs., 340 S.C. 98, 105, 531 S.E.2d 287, 290–91 (2000).
"The right to offset mutual demands is founded upon equitable principles and
the tendency of the courts is to liberalize rather than restrict this right." Brown v.
Lowe, 182 S.C. 9, 12, 188 S.E. 182, 184 (1936).
Regardless of our standard of review or the legal principles applicable in
considering equitable setoff, we face an insurmountable obstacle in reviewing
J&W's argument for relief on this ground: We do not know what the relief would
be because J&W has not told us. At no point in the trial before the master, and at no
point in its argument to this court, has J&W laid out any way of calculating the relief
it is due under its theory of setoff. Cf. In re Fruehauf Trailer Corp., 414 B.R. 36, 42
(Bankr. D. Del. 2009) ("[B]ased on the equitable nature of setoff, in permitting
setoff, a court may calculate the setoff in the way it deems most equitable."
(emphasis added)).
Setoff is indeed in equity, but that does not mean the court can pluck a number
from the sky to fulfill it. There must be a calculation or some other tangible basis
for setting an amount of damages available for the setoff. We are not certain based
on J&W's brief before this court what that calculation would entail. There has been
no evidence of the difference in value between spending ten years in the boat shed
and spending ten years in a floating office. If we are supposed to use lost profits as
our guidepost—which seemed to be the argument counsel made at trial—then we
are without the kind of evidence that would allow us to make such a determination.
See Moore v. Moore, 360 S.C. 241, 254, 599 S.E.2d 467, 473–74 (Ct. App. 2004)
("The crucial requirement in lost profits determinations is that they be established
with reasonable certainty, for recovery cannot be had for profits that are conjectural
or speculative. The proof must pass the realm of conjecture, speculation, or opinion
not founded on facts, and must consist of actual facts from which a reasonably
accurate conclusion regarding the cause and the amount of the loss can be logically
and rationally drawn." (quoting Drews Co. v. Ledwith-Wolfe Assocs., 296 S.C. 207,
213, 371 S.E.2d 532, 535–36 (1988))); id. at 254–55, 599 S.E.2d at 474 ("Proof may
be established through expert testimony, economic and financial data, market
surveys and analyses, business records of similar enterprises, comparison with profit
performance of businesses similar in size, nature and location, comparison with
profit history of plaintiff's successor, comparison of similar businesses owned by
plaintiff himself, and use of economic and financial data and expert testimony."
(quoting Global Prot. Corp. v. Halbersberg, 332 S.C. 149, 158, 503 S.E.2d 483, 487
(Ct. App. 1998))). Even before this court, all J&W asks for is "a substantial set-off."
We are also mindful of Broad Creek Marina's argument that the master
provided a kind of setoff by not awarding prejudgment interest on the Lease
payments despite his finding that Broad Creek Marina was "entitled" to them.
Indeed, the master's order states: "Although it is clear that Tenant owes all back
payments as set forth above, to add pre-judgment interest in the face of an obvious
deficiency in the office space would be inequitable and would be contrary to the
interests of justice in this case." That statement shows that the master was aware of
the issues J&W raised and took them into account as a basis to equitably reduce the
damages he awarded to Broad Creek Marina.
Aside from those efforts by the master, he would not have been able to
determine a reliable amount of damages to apply as a setoff even if he were inclined
to go further. For that reason, we affirm the circuit court's decision on equitable
setoff.
II. THE FLOATING OFFICE (J&W's Issue II)
J&W contends that the master erred by ordering J&W to move into the Aqua
Lodge because the structure violates South Carolina regulations and it does not fulfill
the terms of the interim order. We agree with the master.
We use the standard of review for equity when considering an order for
specific performance. See Ingram, 340 S.C. at 105, 531 S.E.2d at 290 (finding that
an "action for specific performance . . . is in equity"); Campbell, 361 S.C. at 262,
603 S.E.2d at 627 ("An action for specific performance is one in equity."). "In equity
actions[,] an appellate court can review the record and make findings based on its
view of the preponderance of the evidence." Ingram, 340 S.C. at 105, 531 S.E.2d at
290.
J&W's first ground for this assignment of error is built on a misinterpretation
of the regulations governing OCRM. It is true that a provision prohibits
nonwater-dependent structures in areas such as the one at issue in this case "unless
there is no significant environmental impact, an overriding public need can be
demonstrated, and no feasible alternatives exist." S.C. Code Ann. Regs.
30-12(M)(2). However, a "nonwater-dependent" structure is considered "a facility
which cannot demonstrate that dependence on, use of, or access to coastal waters is
essential to the functioning of its primary activity." S.C. Code Ann. Regs.
30-1(D)(36). Therefore, the master's unwillingness to use this as a ground to reject
the Aqua Lodge was reasonable. The regulation does not prohibit the permitting of
the Aqua Lodge.
The remainder of J&W's argument against the Aqua Lodge is that the facility
does not fulfill the required "20-year anticipated service life" the master imposed for
the floating office in his interim order. J&W argues that because the president of the
company providing the Aqua Lodge would not guarantee two decades of life, the
vessel violates the order.
This argument has no merit. The president of the company also stated that
"when properly maintained, Aqua Lodges can remain in service for twenty (20)
years or longer." While a guarantee would certainly fulfill the order's requirement
of an anticipated 20-year life, nothing in the master's order suggests one is necessary.
The master obviously found the statement by the president of the company to be
sufficient, and even given our more flexible standard of review on this issue, we see
no error in that determination. We affirm on this ground. See Ingram, 340 S.C. at
105, 531 S.E.2d at 290–91 ("In equity actions[,] an appellate court can review the
record and make findings based on its view of the preponderance of the evidence.
However, this [c]ourt is not required to disregard the findings of the trial judge who
saw and heard the witnesses and was in a better position to judge their credibility."
(emphasis added) (citations omitted)).
III. INSURANCE AND DOCK DAMAGES (J&W's Issues V and VI)
A. Responsibility for Damage to the Docks
J&W argues that the Master-in-Equity erred by finding that J&W was required
to reimburse Broad Creek Marina for the repair of the docks following Hurricane
Matthew. We disagree.
Because this part of J&W's appeal challenges the court's finding of a breach
of contract, we apply the standard of review for actions at law tried without a jury.
See Walterboro Cmty. Hosp. v. Meacher, 392 S.C. 479, 484, 709 S.E.2d 71, 73 (Ct.
App. 2011) ("A breach of contract action is an action at law." (alteration removed)
(quoting Madden v. Bent Palm Invs., LLC, 386 S.C. 459, 464, 688 S.E.2d 597, 599
(Ct. App. 2010))); see also Bluffton Towne Ctr., LLC, 412 S.C. at 562, 772 S.E.2d
at 887 ("A lease agreement is a contract, and an action to construe a contract is an
action at law." (quoting Middleton, 388 S.C. at 14, 694 S.E.2d at 34)); Duncan, 384
S.C. at 425, 682 S.E.2d at 790 ("In an action at law, tried without a jury, the trial
court's findings of fact will not be disturbed unless found to be without evidence
which reasonably supports the court's findings." (quoting Stanley, 377 S.C. at 409,
661 S.E.2d at 64)).
As a reminder, "[t]he elements for breach of contract are the existence of the
contract, its breach, and the damages caused by such breach." Branche Builders,
Inc., 386 S.C. at 48, 686 S.E.2d at 202.
Here, we know that a contract exists. Assuming for a moment that a breach
is proven, the damages are Broad Creek Marina's payment for the work on the docks.
Our task is to determine whether the master properly determined that the contract
was breached.
"Where a contract is unambiguous, the matter becomes one of law and the
parties' intent as clearly set forth in their agreement must be given effect.
Conversely, where a contract is ambiguous, the fact finder must ascertain the parties'
intentions from the evidence presented." Duncan, 384 S.C. at 424–25, 682 S.E.2d at
790 (citation omitted).
In our view, the master's focus on the liability and indemnity provision of the
Lease was misplaced. A plain reading of that provision reveals that it concerns not
whether J&W must indemnify Broad Creek Marina in a conflict between the two of
them, but whether J&W must indemnify Broad Creek Marina from any third-party
action. Cf. Fountain v. Fred's, Inc., 436 S.C. 40, 47, 871 S.E.2d 166, 170 (2022)
("Indemnity is that form of compensation in which a first party is liable to pay a
second party for a loss or damage the second party incurs to a third party." (quoting
Vermeer Carolina's, Inc. v. Wood/Chuck Chipper Corp., 336 S.C. 53, 60, 518 S.E.2d
301, 305 (Ct. App. 1999))).
Nonetheless, the lease is reasonably clear as to which party bears
responsibility for the cost of any dock repair. The contract provides that "[a]s it
becomes necessary to repair or replace the dock which is a portion of the Lease
Property, [Broad Creek Marina] shall complete said repairs or replacement and
[J&W] shall pay to [Broad Creek Marina] all costs attributed to its use, said costs to
be paid as they are incurred by [Broad Creek Marina]." Despite the energy expended
by the parties and the master on causation, this provision does not require any proof
of causation. The most straightforward reading of the contract is that there will be a
need to repair or replace the docks at the marina at some time, and at that time, J&W
is responsible for the costs incurred by Broad Creek Marina in repairing those docks
that J&W uses.
As a result, while we do not endorse the master's reading of all of the
provisions of the Lease, we agree with his statement that "the various provisions of
the Lease lead to a uniform conclusion: [J&W] is responsible for the cost of repairs
and maintenance to the docks that are the portion of the Lease Property, regardless
of the legal cause of the damage." We affirm. 21
B. The Settlement Agreement's Effect on the Lease
J&W argues that the master erred by not holding that the Settlement
Agreement essentially absolved J&W of any responsibility for helping to repair the
docks or provide insurance on the docks. We disagree.
"In construing terms in contracts, [a c]ourt must first look at the language of
the contract to determine the intentions of the parties." C.A.N. Enters., Inc. v. S.C.
Health & Hum. Servs. Fin. Comm'n, 296 S.C. 373, 377, 373 S.E.2d 584, 586 (1988).
"When a contract is unambiguous, clear and explicit, it must be construed according
21
We also agree with the master's finding that even if the contract is ambiguous,
J&W appears to have been under the same belief as far as its liability for the costs
of dock repairs. J&W sent a letter to its insurance company in 2016 appearing to
accept that it "is responsible for repairs to its leasehold property in the event of
damage" and "calling upon [the insurer] to immediately undertake whatever
investigation you deem necessary to evaluate the damage, so that you may be in a
position to provide the coverage J & W purchased under its policy." See Duncan,
384 S.C. at 425, 682 S.E.2d at 790 ("Conversely, where a contract is ambiguous, the
fact finder must ascertain the parties' intentions from the evidence presented."). We
are less certain than the master that Scurry conceded at trial that J&W was
responsible for the post-Matthew repair of the docks. Scurry did testify that "[t]he
cost of the repairs, in my understanding, was for the landlord to make and bill me."
However, that appears to have been Scurry's answer to a generalized question about
dock repair, and he does not appear to have specifically said, in the exchange that
followed, that J&W was responsible for the post-Matthew repairs. Finally, there are
ambiguities in the Lease as to the use of the pronoun "its" in a provision relating to
the docks: "As it becomes necessary to repair or replace the dock which is a portion
of the Lease Property, Landlord shall complete said repairs or replacement and
Tenant shall pay to Landlord all costs attributed to its use, said costs to be paid as
they are incurred by Landlord." Using "the dock which is a portion of the Lease
Property" instead of J&W as the antecedent for "its," the final part of the sentence
essentially communicates that all costs attributed to the use of that dock—in other
words, all repairs making it suitable for use—are J&W's responsibility. Simply put,
there is evidence in the record to support the master's alternative finding on the
ambiguity of the contract.
to the terms the parties have used, to be taken and understood in their plain, ordinary
and popular sense." Id.22
The Settlement Agreement signed by the parties was exceedingly clear that it
made no changes to the Lease other than those explicitly addressed in the agreement.
The "Recitals" section of the Settlement Agreement expressly stated that the Lease
was incorporated into the Settlement Agreement and "the Parties specifically
reaffirm and ratify the terms and conditions of the Lease attached hereto and
incorporated herein by reference, not specifically modified by the terms of this
document." (Emphasis added). Furthermore, in the "Consideration" section of the
Settlement Agreement, it reiterates that "[e]xcept as set forth, amended or modified
herein, all terms and conditions of the Lease remain in full force and effect."
J&W does not point to any language in the Settlement Agreement that nullifies
any of the Lease's provisions about dock repair or insurance. Instead, it invites this
court to read between the lines and surmise the parties' possible motivations for
signing the deal, regardless of what they committed to paper. We cannot do that.
We are guided by the "unambiguous, clear and explicit" texts of the Lease and the
Settlement Agreement.
For the same reason, we reject J&W's attempts to direct our attention to the
testimony of Scurry and Freedman regarding their understandings of the language.
The agreements in this case say what they say, and there is no ambiguity that would
justify our reliance on outside information. See C.A.N. Enterprises, Inc., 296 S.C.
at 377–78, 373 S.E.2d at 586 ("Extrinsic evidence giving the contract a different
meaning from that indicated by its plain terms is inadmissible."). 23 The Settlement
Agreement is clear that the Lease applies except where it is specifically altered by
the Settlement Agreement. The Lease is clear that J&W is required to carry its own
liability insurance, and the Settlement Agreement does not claim to change that.
22
Indeed, we find it instructive that the C.A.N. Enterprises court made clear its
displeasure with the result dictated by the contract. See id. at 377, 373 S.E.2d at 586("Although we acknowledge that [one party] will receive a windfall, we reluctantly
decline to interpret the contract as the State urges."); id. at 378, 373 S.E.2d at 587("Our duty is limited to the interpretation of the contract made by the parties
themselves '. . . regardless of its wisdom or folly, apparent unreasonableness, or
failure to guard their rights carefully.'" (alteration in original) (quoting Gilstrap v.
Culpepper, 283 S.C. 83, 86, 320 S.E.2d 445, 447 (1984))).
23
Additionally, as previously noted, accounting for extrinsic evidence would also
weaken J&W's case because of the letter to its own insurer.
Additionally, neither the Lease, nor the Settlement Agreement, nor any part
of the master's order requires J&W to provide insurance coverage specifically for
the docks. The Lease instead expressly requires "insurance for personal property,
trade fixtures[,] and property damage, as well as environmental coverage and a
public liability policy," and sets certain requirements for that coverage. The master's
order requires compliance with the insurance provision of the Lease. It does not
specifically require the docks to be insured by J&W. Even if it would be error to
require that, the master did not make that error.
In its brief, J&W argues that it would be illogical to believe that it agreed to
both pay for Broad Creek Marina's insurance and carry its own insurance that could
also be used to help cover the damage to the docks. However, that contradicts the
Lease that J&W signed in 1993. There, J&W agreed to just such an arrangement.
Tenant agrees to pay, upon demand, as Additional Rent,
any and all premiums of insurance carried by the Landlord
on the Property resulting from Tenant's use or occupancy.
Tenant shall keep in full force and effect at Tenant's
expense, insurance for personal property, trade fixtures
and property damage as well as environmental coverage
and a public liability policy all in form and substance
reasonably satisfactory to Landlord, in which Tenant and
Landlord shall be named as the Insured with the following
minimum coverage: one million dollars (and to be
upwardly adjusted yearly to reflect inflation rates).
Why it would be unreasonable for J&W to agree to the same arrangement for
covering potential damage to the docks 11 years later is unclear. We affirm the
master on this ground.
IV. QUASHED SUBPOENA, RELATED DAMAGES (J&W's Issue VII)
Finally, J&W argues that the master erred by quashing a subpoena for certain
records and for awarding damages that might have been affected by those records.
We disagree with the first contention but partially agree on the second.
A. Quashed Subpoena
J&W challenges the master's decision to quash its subpoena, issued a week
before trial, for an extensive set of business records from Broad Creek Marina
employees. We see no error in the master's decision.
"The admission of evidence is within the sound discretion of the trial judge,
and absent a clear abuse of discretion amounting to an error of law, the trial court's
ruling will not be disturbed on appeal." Vaught v. A.O. Hardee & Sons, Inc., 366
S.C. 475, 480, 623 S.E.2d 373, 375 (2005). "To warrant reversal based on the
admission or exclusion of evidence, the appellant must prove both the error of the
ruling and the resulting prejudice, i.e., there is a reasonable probability the jury's
verdict was influenced by the wrongly admitted or excluded evidence." Id.Here, J&W was required to serve each party with written notice of the
subpoena at least ten days before the time specified for compliance. Rule 45(b)(1),
SCRCP (amended 2020).24 The subpoena for additional documents from Rachels is
dated May 8, 2019. The subpoena required her to comply by the morning of May
15, 2019. Because J&W did not provide the required ten days' notice, the master
properly granted the motion to quash.
B. Measure of Damages
As to the damages themselves, J&W contends that there was insufficient
evidence to support some of the damages the master awarded to Broad Creek
Marina. We agree in part.
The trial judge has considerable discretion regarding the
amount of damages, both actual or punitive. Because of
this discretion, our review on appeal is limited to the
correction of errors of law. Our task in reviewing a
damages award is not to weigh the evidence, but to
determine if there is any evidence to support the damages
award.
Austin v. Specialty Transp. Servs., Inc., 358 S.C. 298, 310–11, 594 S.E.2d 867, 873
(Ct. App. 2004) (citations omitted). However, this lenient standard of review does
not mean that a trial court or master is freed from the requirement of evidence.
Generally, in order for damages to be recoverable, the
evidence should be such as to enable the court or jury to
24
This requirement appeared in paragraph (b)(1) in the version of the South Carolina
Rules of Civil Procedure that was in place at the time the subpoenas were issued in
the present case. The 2020 amendment moved this provision to new paragraph (a)(4)
and specified that the written notice must be a copy of the subpoena. See Rule 45,
SCRCP, Note to 2020 Amendment.
determine the amount thereof with reasonable certainty or
accuracy. While neither the existence, causation nor
amount of damages can be left to conjecture, guess or
speculation, proof with mathematical certainty of the
amount of loss or damage is not required.
Whisenant v. James Island Corp., 277 S.C. 10, 13, 281 S.E.2d 794, 796 (1981).
We see at least two portions of the damages award for which the evidence did
not "enable the court . . . to determine the amount thereof with reasonable certainty
or accuracy." Whisenant, 277 S.C. at 13, 281 S.E.2d at 796. The first is Broad Creek
Marina's charges for lot maintenance fees. We have been unable to locate in the
record—and Broad Creek Marina has not pointed to any place in the record—where
Broad Creek Marina proved that $133.12 was the correct monthly charge.
As we previously stated, Rachels conceded that J&W's monthly share of the
lot maintenance costs under Exhibit F should have been approximately $119.79,
instead of the $133.12 that Broad Creek Marina had sought. Rachels explained that
she "just continued billing [J&W] what was being billed when I started." However,
she also testified that (1) the [overall] lot maintenance fee had greatly increased since
2004, when the Settlement Agreement incorporating Exhibit F was signed; (2) she
had not yet increased the amount billed each month; and (3) if current wage
conditions were used to calculate the dock maintenance fee and J&W was charged
the same proportion of those costs, the company would now be charged $144.21 a
month. This may explain why the master did not make a downward adjustment of
the damages award. But rather than speculate on the master's reasoning, we find it
appropriate to remand this precise question to the master for re-calculation of the
amount due for lot maintenance fees "with reasonable certainty or accuracy." Id.More difficult is the issue of the portion of Broad Creek Marina's insurance
premiums for which J&W was responsible. There are statements by Rachels that at
least facially suggest she was using accurate numbers when breaking down the
insurance costs. For example, at one point she testified:
Every year, seems like, it's different; but I do remember
the lady in [the insurance agent's] office forwarding me the
spreadsheet that listed the different properties, like each
building and the percentage of policy, the percentage of
the total amount of the premium, that that would apply to.
One of those items was docks and piers, and that's the
portion of the total . . . that I would have charged J&W
7-and-a-half percent for just the docks and piers.
But it is clear that Rachels did not provide the court with the underlying documentary
basis for the share of the insurance costs that would be attributed to J&W. According
to J&W, this produced an excess of $10,566.47 in the damages award.
However, our supreme court has ruled that even in a de novo review, a court's
damages findings could not be overturned without the contesting party providing
some evidence. In Lewis v. Lewis, our supreme court found that a family court
properly valued the marital home at $800,000, in line with one party's expert, when
the other party "offered only cursory valuation evidence and focused almost
exclusively on disputing the appraiser's value." 392 S.C. 381, 392–93, 709 S.E.2d
650, 655–56 (2011). "We have stated before, and we reiterate here, that a party
cannot sit back at trial without offering proof, then come to this [c]ourt complaining
of the insufficiency of the evidence to support the family court's findings." Id. at
393, 709 S.E.2d at 656 (quoting Honea v. Honea, 292 S.C. 456, 458, 357 S.E.2d
191, 192 (Ct. App. 1987)). The Lewis court also noted that because this court could
not calculate damages without accepting additional evidence, this court had
remanded the case to the family court to do so, unfairly giving the party who had not
provided further evidence "a second bite at the apple." Id. at 393 n.11, 709 S.E.2d
at 656 n.11.
On one hand, there is a clear distinction between this case and Lewis: There
is evidence in the record that the documents that would back up how much Broad
Creek Marina charged J&W for the insurance were in Broad Creek Marina's
exclusive control, unlike Lewis, where either party could have had the property
appraised. On the other hand, J&W waited from the time of a deposition in January
until seven days before the trial in May to subpoena the documents. While the
burden of proof at trial was on Broad Creek Marina, it did produce some evidence
of its damages; J&W did not properly request the evidence that could have disputed
the precise amount of the insurance charges. Some portion of the insurance
premiums were validly charged, and J&W did not produce evidence of those
portions—if any—that were not validly charged.
As a result, we remand the issue of lot maintenance fees for the master's re-
calculation based on Exhibit F and Rachels's testimony and affirm as to the payments
for insurance premiums.
CONCLUSION
For the foregoing reasons, we dismiss the first issue as moot and reverse the
master's ruling on nominal damages. Further, we remand for the imposition of
nominal damages against Broad Creek Marina and a re-calculation of the judgment
against J&W based on the master's determination of a reasonably accurate amount
due for lot maintenance fees. All other rulings of the master are affirmed.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
WILLIAMS, C.J., and VERDIN, J., concur.