Vincent C. Carter v. Eagles Landing Restaurants ( 2022 )

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
Vincent C. Carter d/b/a Elite Construction Co.,
Respondent,
v.
Eagles Landing Restaurants, LLC, Appellant.
Appellate Case No. 2019-001062
Appeal From Florence County
Eugene Preston Warr, Jr., Special Referee
Unpublished Opinion No. 2022-UP-347
Heard April 12, 2022 – Filed August 24, 2022
AFFIRMED AS MODIFIED
Brooks Roberts Fudenberg, of Law Office of Brooks R.
Fudenberg, LLC, of Charleston, for Appellant.
Gary Ivan Finklea and Patrick Buel Ford, both of Finklea
Law Firm of Florence, for Respondent.
PER CURIAM: In this breach of contract and quantum meruit action between
Vincent Carter d/b/a Elite Construction Co. and Eagles Landing Restaurants, LLC
(Eagles Landing), Eagles Landing argues the special referee erred in (1) denying
Eagles Landing a properly calculated setoff, (2) declining to award Eagles Landing
damages for lost profits, and (3) applying an improper standard in reviewing the
parties' Rule 59(e), SCRCP, motions. We affirm as modified.
Facts and Procedural History
Mohammed Makawi owns several IHOP restaurants and manages them through a
limited liability company, Eagles Landing. In 2015, Makawi sought to open a new
IHOP in Charleston. The building, a former Ruby Tuesday restaurant, had been
vacant for ten to twelve years and required extensive renovations.
Carter, a general contractor and friend of Makawi, submitted a bid to renovate the
building for $624,354.00. The bid proposed a ninety-day construction schedule
and included an itemized "bid breakdown" listing the costs for various aspects of
the project. Carter and Makawi executed a lump sum contract (the Contract)
providing, "The Owner shall pay the Contractor the Contract Sum in current funds
for the Contractor's performance of the Contract. The Contract Sum shall be Six
Hundred Twenty Four Thousand Three Hundred Fifty Four ($624,354.00), subject
to additions and deductions as provided in the Contract Documents."
The Contract required Eagles Landing to make progress payments to Carter, with
final payment due after the City of Charleston issued a certificate of occupancy to
the contractor, net 10 days, and specified:
Contractor is to be paid $100,000 from this contract as a
Project Management Fee. Payments to be made to
contractor as progress of work begins. Payment and
amount requested shall be at the discretion of contractor.
Typically, payment draws to contractor for payment shall
be made 1/3 after start net 2 weeks. Another 1/3 half
way into project progress and final 1/3 at or near
completion.
After executing the Contract, Makawi had difficulty obtaining financing and was
unable to get a traditional loan to finance the project. Ultimately, Eagles Landing
borrowed approximately $500,000, and Makawi anticipated proceeds from the sale
of North Carolina real estate would help fund the renovation.
After demolition began, Carter discovered mold in the building and immediately
halted work. Due to the additional work and cost of the mold remediation, Carter
executed a change order. Carter recorded several additional change orders
reflecting both Makawi's requests to amend the scope of the work and Carter's
crediting of Eagle's Landing on certain cost savings.
During the course of construction, Jimmy Free, Eagles Landing's former Chief
Financial Officer, paid Carter when he requested a draw, until at some point,
Makawi instructed Free not to pay Carter. Then, when Eagles Landing did pay, it
did not cover the full draw—instead, Carter had to "prove" what he spent on labor
and materials, and he was paid only enough to cover those costs. This placed
Carter in the position of being unable to pay his subcontractors. Eagles Landing
began paying subcontractors directly due to filed mechanic's liens. In all, Eagles
Landing paid Carter only $229,900 on the $624,354.00 Contract.
On October 23, 2015, the City issued a temporary certificate of occupancy; a
permanent certificate of occupancy followed in late November. On February 10,
2016, Carter notified Eagles Landing of the remaining amount due under the
Contract, which Carter calculated to be $438,306.50. On March 17, 2016,
electrical contractor Carolina Construction Solutions filed an action against both
Carter and Eagles Landing seeking payment for its work on the project.
Carter then filed this action for breach of contract and unjust enrichment/quantum
meruit. Eagles Landing timely answered and counterclaimed for breach of
contract, fraud, quantum meruit, negligence, and indemnification.
Following a nonjury trial, the special referee found Eagles Landing breached the
Contract with Carter. The special referee further held that even if certain change
orders were not part of the Contract, Eagles Landing was unjustly enriched based
on the labor and materials Carter furnished pursuant to the change orders. The
special referee acknowledged the parties agreed Eagles Landing paid $390,888.33
to third-party vendors and subcontractors for work related to the project. The order
then broke down these payments into two itemized lists: one delineating Eagles
Landing's $212,195.26 in third-party payments for work within the scope of the
Contract, and another listing $97,607.74 in payments for work performed outside
the scope of the Contract. After accounting for the previous payments to Carter,
payments to third parties, and certain project-related credits, the special referee
calculated Eagles Landing owed Carter $160,130.83.
Eagles Landing and Carter filed motions to alter or amend the special referee's
order. While these motions were pending, Eagles Landing reached a $50,000
settlement with Carolina Construction Solutions. By supplemental order, the
special referee denied the post-trial motions and increased the award to Carter
"from $160,130.83, to 176,794.99, plus additional interest due" in light of Carter's
own $16,664.16 confession of judgment to Carolina Construction Solutions.
Law and Analysis
I. Setoff for Carolina Construction Solutions Payments
"An action for breach of contract seeking money damages is an action at law."
McCall v. IKON, 380 S.C. 649, 658, 670 S.E.2d 695, 700 (Ct. App. 2008). "In an
action at law tried without a jury, an appellate court's scope of review extends
merely to the correction of errors of law. The Court will not disturb the trial court's
findings unless they are found to be without evidence that reasonably supports
those findings." Miller Constr. Co., LLC v. PC Constr. of Greenwood, Inc., 418
S.C. 186, 195, 791 S.E.2d 321, 326 (Ct. App. 2016) (quoting Temple v. Tec–Fab,
Inc., 381 S.C. 597, 599–600, 675 S.E.2d 414, 415 (2009)). With respect to setoff
requests, "South Carolina courts have consistently held 'there can be only one
satisfaction for an injury or wrong.'" Stoneledge at Lake Keowee Owners' Ass'n,
Inc. v. IMK Dev. Co., LLC, 435 S.C. 109, 133, 866 S.E.2d 542, 555 (2021)
(quoting Smith v. Widener, 397 S.C. 468, 471, 724 S.E.2d 188, 190 (Ct. App.
2012)).
Eagles Landing first asserts the special referee erred in failing to credit it for
payments made to Carolina Construction Solutions for additional electricians and
in failing to recognize the purported savings achieved under the Contract through
the use of these electricians. We disagree.
Although Carter's bid estimated $92,780 for "Electrical Materials and Labor Site
Work," this was a lump-sum contract requiring Eagles Landing to pay Carter a
total of $624,354.00 at draw intervals "at the discretion of contractor." The
Contract provided $100,000 of the contract sum was Carter's project management
fee, and Carter testified he added a markup to certain estimates for the project to
earn a profit.
During the course of the work, Makawi became frustrated by construction delays
and demanded that Carter hire additional electricians. A June 12, 2015 change
order noted:
Carolina Construction Solutions aided in the completion
of electrical services needed on the project. Mr. Makawi
informed Mr. Carter to tell the original contracted
electrician that their services were no longer needed. Mr.
Makawi wanted as many electricians from Carolina
Construction Solutions as were available for his project
to work 7 days a week if necessary to complete all
electrical as quickly as possible. Mr. Makawi was
informed that this would be a change order which he
approved. The original electricians, Turner Electric, had
been working and were completing work as per plans and
specifications, however Mr. Makawi decided he wanted
to go with another contractor.
The change order listed a cost of $37,397.45 to hire the additional electricians and
specifically noted, "** All change orders shall be added to original contract price
and be paid by owner upon completion of work, net 30. **" Makawi understood
the change order would be costly; however, he claimed he did not know how much
more the cost would be. In any event, Carter's bid of $92,780 for "Electrical
Materials and Labor Site Work," did not contemplate hiring additional electricians
to work 24/7 under Makawi's change order and demand to accelerate the
construction process. Thus, we find the special referee properly declined to offset
Eagles Landing's liability to Carter by either its payment to Carolina Construction
Solutions or by any alleged savings under the Contract.
II. Calculation and Crediting of Payments by Eagles Landing
Eagles Landing next asserts the special referee's mathematical or clerical error in
failing to account for a remaining $81,085.33 paid as either within or outside the
scope of the contract resulted in an overstatement of the amount Eagles Landing
owed Carter under the Contract. We disagree.
The trial court is vested with considerable discretion over
the amount of a damages award, and our review of the
amount of damages is limited to the correction of errors
of law. In reviewing a damages award, we do not weigh
the evidence, but determine if any evidence supports the
award.
Oaks at Rivers Edge Prop. Owners Ass'n, Inc. v. Daniel Island Riverside Devs.,
LLC, 420 S.C. 424, 446, 803 S.E.2d 475, 487 (Ct. App. 2017) (quoting Vortex
Sports & Ent., Inc. v. Ware, 378 S.C. 197, 208, 662 S.E.2d 444, 450 (Ct. App.
2008) (citation omitted)).
Eagles Landing spent $620,788.33 in connection with the renovation. Of this,
$229,990 was paid to Carter. The parties disagree as to whether the remaining
$390,788.33 in payments went to third parties on Carter's behalf within the scope
of work of the Contract—and thus should offset the balance Eagles Landing owed
Carter—or were payments made outside the scope of the Contract for reasons
related to Makawi's change orders and supplemental demands.
The special referee found Eagles Landing made payments to twenty-nine vendors:
$212,195.26 on Carter's behalf for work within the scope of the Contract and
$97,607.74 to eleven other vendors for work outside the scope of the Contract.
Thus, the special referee credited Eagles Landing with a line item $212,195.26
offset towards the remaining balance it owed Carter.
Eagles Landing correctly asserts that based on the order's itemized lists, it appears
the special referee failed to account for $81,085.33 in payments by Eagles
Landing. However, the special referee separately addressed additional transactions
later in the order, crediting Eagles Landing with $11,285.00 paid to ARS Rescue
Rooter for work within the scope of the Contract. The special referee's damages
summary on the final page of the order notes this payment as a separate line item
credited to Eagles Landing in addition to the $212,195.26 credit.
Next, the special referee found Eagles Landing was not entitled to an offset credit
or other award for two heating, ventilation, and air conditioning (HVAC) units
because the parties agreed the HVAC system would not need to be replaced, and
Carter issued a credit to Eagles Landing of $44,439.00. The evidence in the record
shows Eagles Landing paid $58,392.96 for "monthly lease total of HVAC units,"
and this would constitute payment outside the scope of the Contract.
Although the special referee made specific findings as to $379.480.96 of the
$390,888.33 in payments, $11,407.37 remains unaccounted for. Our review of the
evidence reveals the special referee did not set forth a specific finding for
$6,259.37 paid to S&D Coffee. Carter testified he did not know what services
S&D Coffee provided and explained coffee would not have been a part of his work
under the Contract. Nor did Carter's bid provide a line item for coffee equipment
or any other kitchen equipment. Eagles Landing does not argue the special referee
erred in not listing this payment as within the scope of the Contract, and we see no
error here.
And although the special referee credited Eagles Landing with $3,500 paid to
Johnson Concrete for work performed within the scope of the Contract, the
evidence in the record shows Eagles Landing actually paid Johnson Concrete
$8,548 for kitchen concrete work. Thus, it appears the accounted for $5,048 is the
difference between the total payments Eagles Landing made to Johnson Concrete
less the $3,500 the special referee credited as within the scope of the Contract.
We do find the special referee's order contains a scrivener's error of $100. The
record establishes Eagles Landing paid Multi-tech Safety Products, Inc., a total of
$26,622.00. However, the special referee's order lists $26,522.00 as the Multi-tech
Safety Products payment. Correcting this results in the itemized list totaling
$212,295.26. Therefore, we find the award to Carter should be reduced to
$160,030.83 to account for this scrivener's error.1 Other than this $100 deviation,
the evidence supports the special referee's damages calculation.
III. Lost Profits
Eagles Landing argues the special referee erred in failing to award $71,784.52 on
its counterclaim for lost profits resulting from the postponement of the opening the
restaurant due to construction delays. However, the record reflects that most, if not
all, delays were due to Makawi's actions or circumstances beyond the control of
either party. The initial delay in starting construction was the result of Makawi's
difficulty obtaining financing. Other delays caused by the discovery of mold in the
long-vacant building and Makawi's change orders cannot be attributed to Carter.
Therefore, we find the special referee properly declined to award Eagles Landing
damages for lost profits. See Branche Builders, Inc. v. Coggins, 386 S.C. 43, 48,
686 S.E.2d 200, 202 (Ct. App. 2009) ("The elements for breach of contract are the
existence of the contract, its breach, and the damages caused by such breach.").
IV. Rule 59(e) motion
Eagles Landing contends the special referee erred in applying an incorrect federal
standard in considering the parties' Rule 59(e), SCRCP, motions. Although the
special referee erred in its initial recitation of the law, we find this error does not
require reversal. In denying both parties' Rule 59(e) motions, the special referee
explained:
After considering the grounds raised in the motions of the
Plaintiff and Defendant, and after reviewing the
1
This adjustment would likewise reduce the $176,794.99 awarded by supplemental
order to $176,694.99.
transcript of the trial, including the testimony of the
witnesses and the exhibits that were admitted into
evidence, as well as the notes from the trial, this Court
denies both the Plaintiff's Motion to Reconsider and the
Defendant's Motion to Amend. The testimony and
exhibits admitted into evidence at trial support the
Court's findings and conclusions.
Because the special referee based its denial of the post-trial motions on the
testimony and exhibits admitted into evidence—and the evidence supports the
referee's findings—we find the order's error in reciting a federal standard does not
warrant reversal or remand. See e.g., Elam v. S.C. Dep't of Transp., 361 S.C. 9, 21,
602 S.E.2d 772, 778–79 (2004) (holding "it is proper to view a Rule 59(e) motion
not only as a vehicle to request the trial court 'alter or amend the judgment,' but
also as a vehicle to seek 'reconsideration' of issues and arguments. A motion under
Rule 59(e) long has been viewed as [a] 'motion for reconsideration' despite the
absence of those words from the rule. Consequently, a party usually is allowed to
ask the court to reconsider its decision even if it means rehashing all or part of an
argument previously presented.").
Conclusion
Based on the foregoing, we affirm the special referee's order as modified to
account for the $100 scrivener's error in the damages award, thereby decreasing the
amount Eagles Landing owes Carter to $176,694.99.
AFFIRMED AS MODIFIED.
THOMAS, MCDONALD, and HEWITT, JJ., concur.