The Spriggs Group v. Slivka ( 2013 )

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
The Spriggs Group, P.C., Respondent,
v.
Gene R. Slivka, Appellant.
Appellate Case No. 2011-204366
Appeal From Colleton County
William H. Seals, Jr., Circuit Court Judge
Unpublished Opinion No. 2013-UP-497
Heard January 10, 2013 – Filed February 6, 2013
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED
Robert T. Lyles, Jr., of Lyles & Lyles, LLC, of
Charleston, for Appellant.
A. Bright Ariail and James Atkinson Bruorton, IV, both
of Rosen Rosen & Hagood, LLC, of Charleston, for
Respondent.
LOCKEMY, J.: In this action for foreclosure of a mechanic's lien and breach of
contract, Gene Slivka argues the circuit court erred in (1) submitting a question
involving the interpretation of section 29-5-10(a) of the South Carolina Code
(2007) to the jury; (2) failing to direct a verdict; and (3) awarding The Spriggs
Group, P.C. (Spriggs) attorney's fees, costs, and interest. We affirm in part,
reverse in part, and remand.
FACTS/PROCEDURAL BACKGROUND
This case arises from a dispute between Slivka and Spriggs regarding Spriggs'
provision of architectural services for Slivka's home. Spriggs designed all of the
buildings on Slivka's Colleton County plantation (the property), including the main
house, two detached garages with apartments, potting shed, conservatory, stable,
and grotto. Pursuant to a November 17, 2006 written proposal (the Agreement),
Spriggs was to receive a fixed fee of $161,500 for its architectural and engineering
design services, and hourly fees for any additional services. The fixed fee was
subsequently reduced to $152,402. Slivka paid half of the fee at the start of the
design process and agreed to pay the remainder upon completion of the project.
According to Slivka, he terminated Spriggs on December 12, 2008. Slivka
contends he picked up the remaining drawings from Spriggs' office and told
Spriggs he did not want any more drawings. Spriggs, however, continued to
perform its services under the Agreement. According to Ken Spriggs, principal of
Spriggs, he was unaware Slivka had allegedly terminated Spriggs. In February
2009, Spriggs submitted four invoices totaling $198,834.53 to Slivka for payment
in accordance with the terms of the Agreement. Slivka admitted he owed Spriggs
$76,201, the balance of the Agreement price, but disputed the additional charges
and refused to pay Spriggs. Spriggs provided services to Slivka pursuant to the
Agreement through May 2009.
As a result of Slivka's failure to pay Spriggs in accordance with the terms of the
Agreement, Spriggs filed a mechanic's lien against the property on April 13, 2009.
Slivka continued to refuse to pay Spriggs and posted a $265,112.71 cash bond to
remove the lien from the property. Thereafter, on July 8, 2009, Spriggs
commenced a foreclosure action on the lien. In an amended complaint filed in
May 2010, Spriggs asserted claims for foreclosure of mechanic's lien, breach of
contract, breach of contract accompanied by a fraudulent act, quantum meruit, and
failure to comply with section 27-1-15 of the South Carolina Code (2007). Slivka
counterclaimed for slander of title, violation of the Frivolous Claims Sanctions
Act, tortious interference with contractual relationships with third parties
dependent upon performance by Spriggs, and tortious interference with contractual
relationships with third parties resulting from defective notice of mechanic's lien.
On June 30, 2011, Slivka offered to settle the case for $100,000, but Spriggs did
not accept the offer. Prior to trial, Spriggs filed a motion to strike Slivka's
affirmative defenses and counterclaims. Thereafter, Slivka filed a motion for
summary judgment as to all of Spriggs' causes of action. Spriggs countered with
its own motion for summary judgment. At the motions hearing, Slivka agreed to
withdraw certain counterclaims, and the circuit court denied both motions for
summary judgment.
The parties proceeded to trial on all of Spriggs' causes of action and on Slivka's
counterclaims for slander of title, tortious interference with contractual
relationships with third parties dependent upon performance by Spriggs, and
tortious interference with contractual relationships with third parties resulting from
defective notice of mechanic's lien. At trial, Spriggs asserted the additional
charges in its invoices were a result of Slivka's demands and changes, and they
were billed pursuant to the Agreement. Slivka maintained the additional charges
were not contemplated when the Agreement was made and Spriggs had a duty to
advise him before performing and charging for additional work.
At the conclusion of Spriggs' case, the circuit court denied Slivka's directed verdict
motions as to Spriggs' causes of action for foreclosure of mechanic's lien, breach of
contract, and failure to comply with section 27-1-15. The circuit court also denied
Spriggs' motion for a directed verdict as to the section 27-1-15 claim. Spriggs
withdrew its claims for breach of contract accompanied by a fraudulent act and
quantum meruit. Following Slivka's case, the circuit court denied Spriggs' motion
for a directed verdict as to Slivka's slander of title claim. Slivka also renewed his
directed verdict motions as to Spriggs' causes of action for foreclosure of
mechanic's lien and failure to comply with section 27-1-15. The circuit court ruled
both causes of action would be submitted to the jury.
Spriggs' foreclosure of mechanic's lien, breach of contract, and failure to comply
with section 27-1-15 claims were submitted to the jury, along with Slivka's slander
of title claim.1 Following deliberations, the jury returned a verdict in favor of
Spriggs on all three of its causes of action and on Slivka's slander of title cause of
action. The jury awarded Spriggs $173,990.53 in actual damages. Slivka made a
post-trial motion seeking a judgment notwithstanding the verdict (JNOV) and/or a
new trial on Spriggs' foreclosure of mechanic's lien and failure to comply with
1
Slivka withdrew both of his tortious interference with contractual relationships
claims.
section 27-1-15 claims.2 The circuit court denied Slivka's JNOV motion and his
subsequent Rule 59(e), SCRCP, motion to alter or amend. Spriggs made a post-
trial motion seeking attorney's fees, costs, and interest. The circuit court granted
the motion and awarded Spriggs $235,030.31 in attorney's fees and costs and
$37,413.92 in prejudgment interest. Thereafter, the circuit court denied Slivka's
Rule 59(e) motion to alter or amend. This appeal followed.
LAW/ANALYSIS
I. Statutory Interpretation
Slivka argues the circuit court erred in submitting the question of whether the
services provided by Spriggs in January 2009 fell within the definition of "labor"
contained in section 29-5-10(a) of the South Carolina Code (2007) to the jury. We
agree but find no reversible error.
Pursuant to section 29-5-90 of the South Carolina Code (2007), a mechanic's lien
shall be dissolved unless the person desiring to avail
himself thereof, within ninety days after he ceases to
labor on or furnish labor or materials for such building or
structure, serves upon the owner . . . a statement of a just
and true account of the amount due him, with all just
credits given, together with a description of the property
intended to be covered by the lien. . . .
Section 29-5-10(a) states:
[L]abor performed or furnished in the erection, alteration,
or repair of any building or structure upon any real estate
includes the preparation of plans, specifications, and
design drawings and the work of making the real estate
suitable as a site for the building or structure. The work is
considered to include, but not be limited to, the grading,
bulldozing, leveling, excavating, and filling of land
(including the furnishing of fill soil), the grading and
paving of curbs and sidewalks and all asphalt paving, the
construction of ditches and other drainage facilities, and
2
Slivka did not appeal the jury's verdict on Spriggs' breach of contract claim.
the laying of pipes and conduits for water, gas, electric,
sewage, and drainage purposes, and the disposal of any
construction and demolition debris, as defined in Section
44-96-40(6), including final disposal by a construction
and demolition landfill. Any private security guard
services provided by any person at the site of the building
or structure during its erection, alteration, or repair is
considered to be labor performed or furnished within the
meaning of this section. . . .
For its lien to be timely, Spriggs must have performed labor, within the definition
contained in section 29-5-10(a), on or after January 13, 2009. According to Andy
Bozeman, a Spriggs employee, Spriggs addressed a plumbing subcontractor's
request to substitute the size of plumbing lines used on the project on January 13,
2009. Bozeman also communicated with a mechanical engineer and answered
questions regarding the plumbing line substitution.
At trial, Slivka argued that while the timeliness of the lien was a question of fact
for the jury to decide, whether the construction administration services performed
by Spriggs on January 13, 2009, fell within the statutory definition of labor was a
question of statutory interpretation for the court. In response, Spriggs argued the
question before the jury was one of timeliness, and the services it provided on
January 13, 2009, were clearly within the definition of labor. The circuit court
decided,
as to the mechanic's lien itself, I'm just going to submit it
to the jury. I'm going to read them the statute. I'm going
to give them the charge . . . . It's kind of long and
redundant but y'all can argue whether that is service that
falls within the mechanic's lien statute. And of course
you can argue the timeliness and all of that kind of stuff.
Slivka contends the question of whether Spriggs' work fell within the purview of
the mechanic's lien statute was erroneously submitted to the jury. Spriggs
maintains the jury was properly instructed to determine whether its lien was valid
and timely. Spriggs also notes the circuit court ruled post-trial it was "implausible
that construction administration services would be excluded from the description
of labor performed or furnished in the erection, alteration, or repair of any
building."
We find the circuit court erred in submitting the question of whether Spriggs' work
fell within the purview of the mechanic's lien statute to the jury. See Catawba
Indian Tribe of S.C. v. State, 372 S.C. 519, 524, 642 S.E.2d 751, 753 (2007)
(holding the issue of interpretation of a statute is a question of law for the court).
However, this error was harmless because, as discussed below, we find the
construction administration services proved by Spriggs fell within the definition of
labor contained in 29-5-10(a).
II. Timeliness of the Lien
Slivka argues the circuit court erred in denying his motion for directed verdict
because Spriggs' lien was not timely. We disagree.
"When reviewing the denial of a motion for directed verdict or JNOV, this Court
must employ the same standard as the [circuit] court by viewing the evidence and
all reasonable inferences in the light most favorable to the nonmoving party."
Welch v. Epstein, 342 S.C. 279, 299, 536 S.E.2d 408, 418 (Ct. App. 2000). "The
[circuit] court must deny the motions when the evidence yields more than one
inference or its inference is in doubt." Id. at 300, 536 S.E.2d at 418. "This Court
will reverse the [circuit] court only when there is no evidence to support the ruling
below." Id. "When considering directed verdict and JNOV motions, neither the
[circuit] court nor the appellate court has authority to decide credibility issues or to
resolve conflicts in the testimony or evidence." Id. at 300, 536 S.E.2d at 419.
First, Slivka contends the work performed by Spriggs on January 13, 2009, does
not fall within the definition of labor contained in section 29-5-10(a) because none
of Spriggs' work involved "the preparation of plans, specifications, and design
drawings." Slivka maintains none of the work performed by Bozeman occurred on
site, and the work only amounted to construction administration services. Slivka
argues the circuit court erred in relying on Williamson v. Hotel Melrose, 110 S.C.
1, 96 S.E. 407 (1918), in finding construction administration services are a type of
labor for which a mechanic's lien may be filed under the mechanic's lien statute. In
Williamson, our supreme court determined an architect who furnished plans and
specifications and "superintended" the construction of a project had performed
labor within the meaning of the mechanic's lien statute. 110 S.C. at 1, 96 S.E. at
411. At the time, the mechanic's lien statute did not include the definition of labor
contained in the current statute. The statute at the time afforded a lien to "any
person to whom a debt is due for labor performed or furnished." Id.Slivka maintains Williamson is not applicable because the current version of the
mechanic's lien statute, section 29-5-10(a), contains specific activities determined
by the legislature to be "labor" and does not include construction administration
services. Slivka argues the legislature could have included off-site construction
administration services of a design professional in its definition of labor but it
chose not to. Furthermore, Slivka maintains Spriggs was not on-site directing the
work on the property like the architect in Williamson. Ken Spriggs testified he was
not directing any work or supervising the construction.
We find the construction administration services provided by Spriggs are labor
pursuant to the definition of labor in section 29-5-10(a). While the statute provides
labor "includes the preparation of plans, specifications, and design drawings," it
also states labor includes "the work of making the real estate suitable as a site for
the building or structure." Here, Spriggs' discussions with the plumber and
engineer in January 2009 were part of its architectural services overseeing the
proper construction of the property.
Slivka also contends the circuit court erred in finding work performed by Spriggs
in May 2009 supported the timeliness of the lien filed on April 13, 2009. At trial,
Bozeman testified he provided design sketches for an appraisal of the property in
May 2009. Slivka argues this work could not support the timeliness of Spriggs'
lien because it was allegedly performed after the lien was filed. We find the circuit
court did not err because the court's order does not explicitly say, as alleged by
Slivka, that the May 2009 services were performed within ninety days of April 13,
2009. While the circuit court order mentions the May 2009 services, it notes these
services were performed after the lien was filed. The court also specifically notes
the lien was filed within ninety days of January 13, 2009. Accordingly, we affirm
the circuit court's denial of Slivka's motion for a directed verdict on Spriggs'
mechanic's lien claim.
III. Attorney's Fees, Costs, and Interest
"A party cannot recover attorney's fees unless authorized by contract or statute."
Cullen v. McNeal, 390 S.C. 470, 491, 702 S.E.2d 378, 389 (Ct. App. 2010). Here,
sections 27-1-5 and 29-5-10 of the South Carolina Code (2007) both authorize an
award of attorney's fees to Spriggs. Pursuant to section 27-1-15,
[w]henever a contractor, laborer, design professional, or
materials supplier has expended labor, services, or
materials under contract for the improvement of real
property, and where due and just demand has been made
by certified or registered mail for payment for the labor,
services, or materials under the terms of any regulation,
undertaking, or statute, it is the duty of the person upon
whom the claim is made to make a reasonable and fair
investigation of the merits of the claim and to pay it, or
whatever portion of it is determined as valid, within
forty-five days from the date of mailing the demand. If
the person fails to make a fair investigation or otherwise
unreasonably refuses to pay the claim or proper portion,
he is liable for reasonable attorney's fees and interest at
the judgment rate from the date of the demand.
Additionally, pursuant to section 29-5-10(a), "[t]he costs which may arise in
enforcing or defending against the lien. . . , including a reasonable attorney's fee,
may be recovered by the prevailing party." "The fee must be determined by the
court in which the action is brought but the fee and court costs may not exceed the
amount of the lien." Id.The following six factors should be considered when determining reasonable
attorney's fees: "(1) the nature, extent, and difficulty of the case; (2) the time
necessarily devoted to the case; (3) professional standing of counsel; (4)
contingency of compensation; (5) beneficial results obtained; and (6) customary
legal fees for similar services." Jackson v. Speed, 326 S.C. 289, 308, 486 S.E.2d
750, 760 (1997). "The decision to award or deny attorneys' fees under a state
statute will not be disturbed on appeal absent an abuse of discretion." Kiriakides v.
Sch. Dist. of Greenville Cnty., 382 S.C. 8, 20, 675 S.E.2d 439, 445 (2009). "An
abuse of discretion occurs when the conclusions of the [circuit] court are either
controlled by an error of law or are based on unsupported factual conclusions." Id."Similarly, the specific amount of attorneys' fees awarded pursuant to a statute
authorizing reasonable attorneys' fees is left to the discretion of the trial judge and
will not be disturbed absent an abuse of discretion." Id.A. Section 27-1-15
Slivka argues the circuit court erred in denying his motion for a directed verdict on
Spriggs' failure to comply with the section 27-1-15 claim. We disagree.
Slivka contends Spriggs failed to present any evidence Slivka did not perform a
fair and reasonable investigation because at the time Spriggs made its demand
under the statute the parties were involved in litigation initiated by Spriggs. We
find whether a fair and reasonable investigation of Spriggs' claim has been made
and whether a valid portion of the claim was paid in a timely manner are questions
of fact for the jury. See Hardaway Concrete Co., Inc. v. Hall Contracting Corp.,
374 S.C. 216, 229, 647 S.E.2d 488, 495 (Ct. App. 2007) (holding whether a party
made a fair and reasonable investigation of the merits of a claim is a question of
fact).
Additionally, Slivka argues at the time the demand was made it was impossible to
determine the "valid" amount due because of the parties' pending claims against
each other for damages. Finally, Slivka maintains his failure to make a payment at
the time of the demand was not unreasonable because he had already paid the court
a cash bond exceeding the amount of Spriggs' claim. Slivka fails to cite any legal
precedent to support these arguments. Accordingly, we find these arguments are
abandoned on appeal. See Bennett v. Investors Title Ins. Co., 370 S.C. 578, 599,
635 S.E.2d 649, 660 (Ct. App. 2006) (noting when an appellant fails to cite any
supporting authority for his position and makes conclusory arguments, the
appellant abandons the issue on appeal).
B. Amount of Attorney's Fees and Costs
Slivka argues the circuit court erred in awarding Spriggs $235,030.31 in attorney's
fees and costs. We agree.
The circuit court determined Spriggs was entitled to $235,030.31 in attorney's fees
and costs pursuant to sections 29-5-10 and 27-1-15. The court further found the
fees and costs awarded were reasonable based upon the six criteria established by
the supreme court. The circuit court noted, "[Spriggs] was required to expend
considerably more time and effort on this case due to specific actions of [Slivka]
who created unnecessary delays, filed meritless motions, and forced [Spriggs] to
incur additional attorney's fees and costs above and beyond what would otherwise
have been incurred."
First, Slivka argues Spriggs was not entitled to recover $28,619.25 in staff member
fees as part of its attorney's fees award. We find the circuit court did not abuse its
discretion in including staff member fees in its award of attorney's fees. We note
Slivka fails to cite any legal precedent to support this argument. Additionally, this
court has upheld attorney's fees awards which included paralegal fees. See
McElveen v. McElveen, 332 S.C. 583, 602, 506 S.E.2d 1, 11 (Ct. App. 1998);
Charleston Lumber Co. v. Miller Housing Corp., 318 S.C. 471, 484, 458 S.E.2d
431, 439 (Ct. App. 1995).
Next, Slivka contends Spriggs' total recovery is limited to the amount of the cash
bond he posted with the clerk of court. Slivka argues that pursuant to section 29-5-
110 of the South Carolina Code (2007), the total payment to Spriggs is limited to
$266,012.71, the amount of the cash bond he paid to the clerk of court. Therefore,
Slivka maintains because Spriggs' verdict was $173,990.53, any award of
attorney's fees under the mechanic's lien statute is limited to a maximum of
$92,022.18. We disagree. Section 29-5-110 relates to the amount of the judgment
and makes no mention of attorney's fees. Attorney's fees are specifically addressed
in section 29-5-10, which provides that the costs and fees incurred in enforcing or
defending against the lien may be recoverable by the prevailing party up to the
amount of the lien. See § 29-5-10(a).
Finally, Slivka argues the attorney's fees awarded by the circuit court are not
reasonable and the circuit court order fails to specify which fees were awarded
pursuant to which statute. Although the amount of attorney's fees awarded in this
case, compared to the jury award, may not shock the conscience of this court, the
needle is definitely moving on the seismograph. The circuit court order is unclear
as to which fees were awarded under which statutory authority. We note the
court's award exceeds the amount permitted under the mechanic's lien statute.
Further, although theoretically possible, it is improbable an attorney's fee of almost
$250,000 would be awarded for a net recovery of approximately $75,000 above the
$100,000 settlement offered by Slivka under section 27-1-15. The circuit court
may have combined the two statutes to reach the figure, although the legality of
that procedure is not addressed in this decision. Moreover, the trial court surely
did not award fees for the two causes of action it dismissed or for the breach of
contract claim. Thus, because we find the circuit court's order is unclear, we
reverse the court's award of $235,030.31 in attorney's fees to Spriggs and remand
the issue of attorney's fees to the circuit court for reconsideration. We order the
circuit court to clearly identify the statutory authority for its award and the fees
incurred under each statute.
C. Prejudgment Interest
Slivka argues the circuit court's award of $37,413.92 in prejudgment interest to
Spriggs was not supported by statute. We disagree.
The law permits the award of prejudgment interest when a monetary obligation is a
sum certain, or is capable of being reduced to certainty, accruing from the time
payment may be demanded either by the agreement of the parties or the operation
of law. Butler Contr., Inc. v. Court St., LLC, 369 S.C. 121, 133, 631 S.E.2d 252,
258 (2006). Generally, prejudgment interest may not be recovered on an
unliquidated claim in the absence of agreement or statute. Id. The fact that the
amount due is disputed does not render the claim unliquidated for purposes of
awarding prejudgment interest. Id. Rather, the proper test is "whether or not the
measure of recovery, not necessarily the amount of damages, is fixed by conditions
existing at the time the claim arose." Id. "The award of prejudgment interest will
not be disturbed on appeal unless the [circuit] court committed an abuse of
discretion." Historic Charleston Holdings, LLC v. Mallon, 381 S.C. 417, 435, 673
S.E.2d 448, 457-58 (2009).
We find the circuit court did not err in awarding Spriggs prejudgment interest. We
note the court's award of prejudgment interest was not limited to Spriggs' cause of
action for failure to comply with section 27-1-15. The court also awarded interest
on Spriggs' breach of contract claim, which was not appealed and is the law of the
case. Accordingly, we affirm the circuit court's award of prejudgment interest.
CONCLUSION
We find the construction administration services provided by Spriggs fell within
the definition of labor contained in section 29-5-10(a). Additionally, we affirm the
circuit court's award of prejudgment interest and denial of Slivka's directed verdict
motions as to Spriggs' section 27-1-15 and mechanic's lien claims. We reverse the
circuit court's award of attorney's fees and remand for reconsideration.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
SHORT and KONDUROS, JJ., concur.