Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia

THE STATE OF SOUTH CAROLINA
In The Supreme Court
Stevens and Wilkinson of South Carolina, Inc., Gary
Realty Company, Inc., Garfield Traub Development,
LLC, and Turner Construction Company, Plaintiffs,
Of Whom Stevens & Wilkinson of South Carolina, Inc.,
Gary Realty Company, Inc., and Garfield Traub
Development, LLC, are Respondents,
v.
City of Columbia, Paul C. "Bo" Aughtry III,
Windsor/Aughtry Co., Inc., Vista Hotel Partners, LLC,
and Hilton Hotels Corporation, Defendants,
Of Whom the City of Columbia, is Petitioner.
Appellate Case No. 2012-208490
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal from Richland County
The Honorable George C. James, Jr., Circuit Court Judge
Opinion No. 27434
Heard January 21, 2014 – Filed August 20, 2014
REVERSED
Michael W. Tighe, D. Reece Williams, III, Richard C.
Detwiler, and Kathleen M. McDaniel, all of Callison
Tighe & Robinson, LLC, of Columbia, for Petitioner.
Richard A. Harpootlian and Graham L. Newman, both of
Richard A. Harpootlian, PA, of Columbia; Kenneth M.
Suggs and Francis M. Hinson, IV, both of Janet Jenner &
Suggs, LLC, of Columbia, for Respondents.
JUSTICE HEARN: The respondents, two developers and an architectural
firm, entered into a Memorandum of Understanding (MOU) with the City of
Columbia as part of a larger project team to develop a publicly-funded hotel for the
Columbia Metropolitan Convention Center. The City eventually abandoned its
plan under the MOU, and the respondents brought suit on several causes of action
including breach of contract and equitable relief. The City moved for summary
judgment arguing the MOU was not a contract and therefore the contract claims
failed. The circuit court agreed and, rejecting the equitable claims as well, granted
summary judgment in favor of the City. The respondents appealed and the court of
appeals affirmed in part and reversed in part. Stevens & Wilkinson of South
Carolina, Inc. v. City of Columbia, 396 S.C. 338, 721 S.E.2d 455 (Ct. App. 2011).
We reverse.
FACTUAL/PROCEDURAL BACKGROUND
In January of 2001, the City, seeking a team to develop a publicly-funded,
full-service hotel adjacent to the convention center, issued a request for
qualifications. The City settled on a project team in December of 2002 that
consisted of the architectural firm of Stevens & Wilkinson of South Carolina, Inc.
(S&W); Turner Construction Company; Hilton Hotels Corporation; the
underwriter Salomon Smith Barney, Inc.; and three developers—Edens & Avant
Real Estate Services LLC; Garfield Traub Development, LLC; and Gary Realty
Company Inc.
In April of 2003, the City and the project team members entered into the
MOU. The MOU documented "the understandings reached with respect to the
financing, development and operation of the Hotel." It contemplated multiple
future agreements to fully define the duties of the parties—the Development
Management Agreement, the Design/Build Agreement, the Qualified Management
Agreement, and the HQ Hotel Room Block Commitment, a joint use agreement for
parking, and a bond financing agreement. At the outset, the MOU provided:
This MOU reflects the intent to proceed in good faith to execute
definitive written agreements with respect to the business terms and
conditions herein contained. Notwithstanding anything herein to the
contrary, if the City determines that is it not feasible to proceed with
the Hotel project it shall have no liability under this MOU.
Additionally, the MOU illustrated the roles of the signatories. The City was to
acquire the land and prepare it for construction, establish a non-profit corporation
to own the Hotel and issue bonds for financing, and "retain [Salomon] and legal
counsel to structure and issue approximately $60 million in tax exempt hotel
revenue bonds." Under the MOU, the "Developer"—Edens, Garfield, and Gary—
"will coordinate design, development, construction and delivery of Hotel in
accordance with the terms of the Development Management Agreement to be
finalized between the City or [non-profit corporation]." S&W, the architect, "shall
develop and implement a design review process."
The MOU also addressed payment of the project team, stating:
The Project Team will be responsible for the costs incurred prior to
closing the financing. . . . If Hotel financing fails to close as a result
of the City not meeting its obligations outlined in the Development
Management Agreement, . . . the City will reimburse the Project Team
for actual, documented costs incurred to that point up to an amount to
be agreed upon.
Additionally, the MOU clarified any payment to S&W, Turner, or Salomon was
contingent upon Salomon successfully closing the bond financing. The MOU also
stated: "All studies, tests, plans and the like prepared or obtained by the Project
Team will be assigned to and become property of the City."
The parties began negotiating the contracts required under the MOU during
the course of the next year. S&W completed its initial design thereby allowing
Turner to determine the guaranteed maximum price of the project as envisioned
under the MOU, and that price was approved by the City in July 2003. S&W
informed the City it would cease design work for the ninety days remaining until
the bond financing closed unless the City agreed to compensate it for work
performed in the interim. S&W submitted an estimate of $650,000 to continue
working until the anticipated bond closing and $75,000 per week after that. On
July 30, 2003, the city council voted to approve "$650,000 for interim architectural
design."
Over the course of the negotiations, the bond issuance required to fund the
project rose from the $60 million estimated in the MOU to $71 million by
February 2004. Nevertheless, the non-profit organization accepted the financing
plan for the $71 million and set the bond closing date as April 1, 2004. However,
by mid-March the estimate had climbed to above $72 million. A little over a week
after receiving this most recent financial report, the City issued a new request for
proposals to develop a privately-funded hotel for the convention center.
Ultimately Windsor/Aughtry Co., Inc. was chosen as the developer and it
successfully constructed the Hilton.
S&W sued the City for breach of contract based on the MOU and the July 30
agreement, and on the equitable grounds of quantum meruit and estoppel.1 Gary
and Garfield also sued the City for quantum meruit and breach of the duty of good
faith, later adding a breach of contract claim. The City moved for summary
judgment arguing the MOU was not a contract, it retained no benefit from the work
of the project team, and the MOU contained no promise to pay S&W.
In a consolidated order, the circuit court granted summary judgment in favor
of the City on all claims.2 Specifically, the court found the MOU was not a
binding contract, and instead was a nonbinding agreement to agree in the future. It
further held that the respondents failed to present any evidence they had conferred
a benefit on the City, and that S&W failed to prove a promise to pay existed within
the MOU or that reliance on the MOU for payment was reasonable.
S&W appealed the issue of whether the MOU was a contract and the issue
of promissory estoppel. Gary and Garfield appealed the issue of whether the MOU
was a contract and their claim for quantum meruit. The court of appeals affirmed
in part and reversed in part. Stevens, 396 S.C. at 340, 338 S.E.2d at 456. The
court affirmed the grant of summary judgment on S&W's claim for promissory
1
S&W moved for partial summary judgment arguing the July 30 agreement
created a contract between it and the City. That case is the subject of our opinion
in Stevens & Wilkinson of South Carolina, Inc. v. City of Columbia, Op. No. 27433
(S.C. Sup. Ct. filed August 20, 2014).
2
Turner Construction also filed suit against the City for breach of contract,
quantum meruit, contract implied by law, and breach of the duty of good faith and
fair dealing. Turner's case was consolidated with the respondents' cases and it
simply joined the arguments of the respondents at the hearing. It did not file an
appeal.
estoppel. Id. It held the circuit court erred in granting summary judgment on the
grounds the MOU is not a contract, finding there was conflicting evidence as to
whether the parties intended to create a binding contract, and therefore reversed
and remanded on that issue. Id. at 344, 721 S.E.2d at 458. The court of appeals
also reversed the grant of summary judgment on Gary and Garfield's quantum
meruit claims, stating it could not rule as a matter of law the City retained no
benefit. Id. at 347, 721 S.E.2d at 460. The Court granted certiorari to review the
court of appeals' opinion.
ISSUES PRESENTED
I. Did the court of appeals err in finding a genuine issue of material fact
existed as to whether the MOU is a binding contract?
II. Did the court of appeals err in reversing the circuit court's grant of
summary judgment in favor of the City on Gary and Garfield's claim for
quantum meruit?
STANDARD OF REVIEW
"The purpose of summary judgment is to expedite disposition of cases which
do not require the services of a fact finder." Dawkins v. Fields, 354 S.C. 58, 69,
580 S.E.2d 433, 438 (2003). On review from a grant of summary judgment, the
Court applies the same standard applied by the circuit court pursuant to Rule 56(c),
SCRCP. Knight v. Austin, 396 S.C. 518, 521–22, 722 S.E.2d 802, 804 (2012).
Accordingly, summary judgment is appropriate when the pleadings, depositions,
affidavits, and discovery prove there is no genuine issue of material fact and the
movant must prevail as a matter of law. Id. In reviewing the evidence, all
inferences must be viewed in the light most favorable to the non-moving party. Id.LAW/ANALYSIS
I. MEMORANDUM OF UNDERSTANDING
A. Extrinsic Evidence
Initially, the City argues the court of appeals erred in looking outside the
four corners of the MOU to determine whether it constituted a binding contract.
Because we find the MOU is unambiguously not an enforceable contract, we
agree.
"Where an agreement is clear on its face and unambiguous, the court's only
function is to interpret its lawful meaning and the intent of the parties as found
within the agreement." Miles v. Miles, 393 S.C. 111, 117, 711 S.E.2d 880, 883
(2011) (quotation omitted). Where the contract language is plain and capable of
legal construction, that language alone determines the instrument's force and effect.
Jordan v. Sec. Grp., Inc., 311 S.C. 227, 230, 428 S.E.2d 705, 707 (1993).
The respondents argue the MOU is a complete contract, lacking no material
terms and the MOU itself claims it fully "identifies the understandings of the
parties." Although the majority of case law addressing extrinsic evidence pertains
to contract construction and not the existence of a contract, the inquiry in both
instances involves giving force and effect to the intent of the parties, and we
discern no reason for different rules of analysis.3 As this Court has stated:
When a writing, upon its face, imports to be a complete
expression of the whole agreement, and contains thereon all that is
necessary to constitute a contract, it is presumed that the parties have
3
The respondents rely heavily on Conner v. City of Forest Acres, 363 S.C. 460,
611 S.E.2d 905 (2005), for the proposition that "when the existence of a contract is
disputed or its terms are ambiguous, evidence that a party complied with the terms
of the alleged contract or acted in conformity therewith is relevant and admissible
on the issues of the contract's existence, the meaning of its terms, and whether the
contract was breached." Id. at 473, 611 S.E.2d at 912. The facts of Conner are
inapposite. Conner was a so-called "employee handbook claim" which dealt with
the termination of an employee and posed the question of whether evidence of the
employer's grievance procedures was admissible in determining whether the
employee handbook provisions constituted contractual terms. Id. at 473, 611
S.E.2d at 912. The employee contended the handbook modified the terms of her
existing at-will employment contract, and therefore the Court held evidence that
the employer followed the procedures within the handbook was probative of the
intent to treat the handbook as contractual. Id. at 473, 611 S.E.2d at 911.
Therefore, Conner addressed contract modification, not whether a single document
constituted a contract.
introduced into it every material item and term, and parol evidence is
not admissible to add another term to the agreement, although the
writing contains nothing on the particular item to which the parol
evidence is directed.
Gladden v. Keistler, 141 S.C. 524, 542, 140 S.E. 161, 167 (1927). We accordingly
hold that where the language of a purported contract clearly expresses the intent to
be non-binding, the analysis is limited to the four corners of the document.4
B. Existence of Enforceable Contract
The City also argues the court of appeals erred in holding a genuine issue of
material fact exists as to whether the MOU is a contract. We agree.
Although the existence of a contract is ordinarily a question of fact for the
jury, where the undisputed facts do not establish a contract, the question becomes
one of law. Capital City Garage & Tire Co. v. Elec. Storage Battery Co., 113 S.C.
352, 362, 101 S.E. 838, 841 (1920). A valid and enforceable contract requires a
meeting of the minds between the parties with regard to all essential and material
terms of the agreement. Patricia Grand Hotel, LLC v. MacGuire Enters, 372 S.C.
634, 638, 643 S.E.2d 692, 694 (Ct. App. 2007). Thus, for a contract to be binding,
material terms cannot be left for future agreement. Aperm of S.C. v. Roof, 290 S.C.
442, 447, 351 S.E.2d 171, 173 (Ct. App. 1986). "In a contract for services two
essential terms are the scope of the work to be performed and the amount of
compensation." W.E. Gilbert & Assocs. v. S.C. Nat. Bank, 285 S.C. 421, 423, 330
S.E.2d 307, 309 (Ct. App. 1985).
In reversing the circuit court, the court of appeals focused on the intent of
the parties, noting that there were mutual promises within the MOU and some
boilerplate contractual language that at least create a genuine issue of material fact
as to whether the parties intended the MOU to be a contract. However, regardless
4
The dissent contends our holding in some way does violence to the parol
evidence rule as well as the statute of frauds. We disagree. Of course the parol
evidence rule involves actual contracts, not purported ones such as the written
agreement here. We make only the unremarkable assertion that where a written
document, by its own terms, unambiguously indicates it is meant to be non-
binding, we will not allow the introduction of extrinsic evidence in an attempt to
contradict that clear expression.
of intent, an agreement which leaves open material terms is unenforceable. Aperm,
290 S.C. at 447, 351 S.E.2d at 173; 1 Corbin on Contracts § 2.8 (Rev. ed. 1993)
("Even if an intention to be bound is manifested by both parties, too much
indefiniteness may invalidate the agreement, because of the difficulty of
administering the agreement."); 1 Corbin on Contracts § 4.1 ("A court cannot
enforce a contract unless it can determine what it is. It is not enough that the
parties think that they have made a contract. They must have expressed their
intentions in a manner that is capable of being understood.").
Examining the plain language of the document, we find there was no
meeting of the minds as to all material terms and the MOU is therefore
unenforceable. It is only an agreement to agree in the future outlining the
framework under which the parties would proceed to negotiate the development of
the hotel. By its own terms, it "reflects the intent to proceed in good faith to
execute definitive written agreements with respect to the business terms and
conditions herein contained." (emphasis added). The MOU expressly states the
intention to enter into future "definitive" agreements, such as the Development
Management Agreement, the Design/Build Agreement, the Qualified Management
Agreement, and the HQ Hotel Room Block Commitment. Thus, the clear language
of the MOU indicates the parties consciously agreed to finalize binding agreements
at some point in the future.
The respondents counter that the MOU provides clear guidelines for the
subsequent agreement and therefore the MOU is enforceable under Aperm. In that
case, Aperm of South Carolina, the owner of a roof coating composition and
application method entered into an option agreement with Roof and granted him
exclusive license to research, develop, manufacture and sell its invention. Aperm,
290 S.C. at 444, 351 S.E.2d at 172. The agreement allowed Roof to terminate the
contract upon written notice by August 1, otherwise the agreement would become
fixed. Id. Under the agreement, Roof was also required to present Aperm with a
comprehensive manufacturing and marketing program which conformed to the
agreement's guidelines. Id.
The program was required to include minimum royalty payments of
$4,800.00 per month during the period August 1, 1981 to July 31,
1982, and increased monthly royalty payments thereafter. The
marketing and manufacturing program was subject to Aperm's
approval, but disapproval had to be reasonably related to the
guidelines set out. The contract stated specifically that if the program
provided for the minimum royalties, then objections to the program by
Aperm would be subject to arbitration, but if the program failed to
provide for minimum royalties, Aperm could cancel the contract.
Id. at 444–45, 351 S.E.2d at 172. Roof exercised his rights under the agreement to
proceed therewith, but almost immediately defaulted for failing to pay the required
royalties to Aperm. Id. at 445, 351 S.E.2d at 172. Aperm sued Roof for breach of
contract and the trial court awarded damages pursuant to the licensing agreement.
Id. at 446, 351 S.E.2d at 173. Roof appealed, arguing the licensing agreement was
merely an agreement to enter into a contract after August 1 and was therefore
unenforceable. Id. at 446–47, 352 S.E.2d at 173. The court of appeals disagreed,
finding sufficient guidelines for drafting a subsequent manufacture and marketing
agreement within the licensing agreement to enforce it. Id. at 447, 352 S.E.2d at
174. The court stated that the sine qua non of the manufacture and marketing
program was the payment of minimum royalties, noting Aperm agreed to arbitrate
the other terms. Id.
We find this case distinguishable from Aperm. In Aperm, the licensing
agreement clearly set out the specific sum of minimum royalties and clarified that
this payment was the salient factor for the program. Additionally, the Aperm
agreement only contemplated one future document. Here, the MOU envisions the
parties entering into multiple agreements and describes the intended agreements
with a fluidity that renders it impossible for a court to anticipate the terms. For
example, pursuant to the MOU, "The Developer will coordinate design,
development, construction and delivery of the Hotel in accordance with the terms
of the Development Management Agreement to be finalized between the City or
[non-profit corporation] and the Developer." This leaves the scope of work to be
performed by the Developer still undefined as it is as yet unclear how it will
design, develop, and construct the hotel. We cannot see how merely stating a
forthcoming document will dictate the terms of the "design, development,
construction and delivery" does not plainly leave material terms undecided. The
whole project is the design, development, construction, and delivery of the hotel.5
5
The respondents claim the Preliminary Development Management Scope of
Services which was an attachment to the MOU, could have been the final
Development Management Agreement. We disagree. That document also lacks
significant material terms, including any duties of the City and caps on financial
liability as contemplated in the MOU.
Nor is the scope of S&W's duties clearly defined. The only description of
the work S&W was to perform under the MOU is to "develop and implement a
design review process" and contains no specific reference to an actual design.
There are no guidelines as to what this process should look like, only that it should
"provide the City, neighborhood and professional staff input into the design of the
hotel." The MOU lacks any provisions on actual design duties of S&W and
instead plainly envisions a subsequent contract between S&W and Turner. It is
pursuant to this contract with Turner that S&W would be paid.
Furthermore, although initially the parties' compensation appears
ascertainable with some certainty, calculating the amounts requires unknown
numbers. For example, the Developer "is to be paid a development fee of 4.75%
of the project budget," which was undetermined. S&W was to be paid by Turner
"a fee of 7.25% . . . based on hard construction costs together with [Turner's]
general expenses and fees." Aside from the fact Turner, and not the City, was to
pay S&W, that amount was based on a sum—costs and fees determined by
Turner—that was yet to be determined. Additionally, the MOU specifically states
in reference to Turner and S&W that "[i]f the Underwriter does not close the
financing, the City will not be responsible for reimbursing any costs incurred
[unless the City breached its duties in the Development Agreement]." The MOU
further clarifies that "[t]he Project Team will be responsible for the costs incurred
prior to closing the financing. . . . If the Hotel financing fails to close as a result of
the City not meeting its obligations outlined in the Development Agreement, . . .
the City will reimburse the Project Team for actual, documented costs incurred to
that point in time up to an amount to be agreed upon." Thus, any possible liability
of the City for costs incurred prior to closing the financing was to be agreed upon
in a future agreement—the Development Agreement. This document would
illustrate the obligations of the City and create liability for any breach.
Furthermore, the document would contain an agreed upon limitation on liability. It
appears the parties all acknowledged the City's liability would be predicated on the
Development Agreement, a forthcoming contract that was never executed.
Nevertheless, the respondents argue that focusing on the unfilled gaps of the
agreement, such as the bond financing, ignores the fact that one of the duties under
the MOU was to obtain the bond financing. Essentially, they argue the MOU is
comprised of interdependent parts that are all promises to perform certain specified
duties to develop a plan for a feasible, publicly-funded hotel. While we agree that
the determination of many of the terms within the MOU necessarily depend on the
execution of other portions of the MOU, we fail to see how that changes the
analysis.
Frequently, agreements are arrived at piecemeal with different terms
and items being discussed and agreed upon separately. However, as
long as the parties know there is an essential term not yet agreed on,
there is no contract. The preliminary agreements on specific items are
mere preliminary negotiation building up the terms of the final offer
that may or may not be made.
1 Corbin on Contracts § 2.8. From the plain language of the MOU, it is clear the
parties knew material terms still remained to be agreed upon. They were also
undoubtedly aware that payment and reimbursement was contingent upon
obtaining bond financing, which never took place. The parties were in the process
of negotiating a plan to develop the hotel and the MOU simply memorialized how
the parties planned to proceed in those negotiations toward the execution of
binding contracts.
Because the MOU is simply comprised of agreements to execute further
agreements, there was no meeting of the minds on numerous material terms which
had not yet been defined. Accordingly, we reverse the court of appeals and hold
the MOU is unenforceable as a matter of law.
II. QUANTUM MERUIT
The City also argues the court of appeals erred in reversing the circuit court's
grant of summary judgment finding no evidence of a benefit conferred on the City
to maintain Gary and Garfield's quantum meruit claim. We agree.
Quantum meruit is an equitable doctrine which allows recovery for unjust
enrichment under a quasi-contract theory. Columbia Wholesale Co. v. Scudder
May N.V., 312 S.C. 259, 261, 440 S.E.2d 129, 130 (1994). "The elements of a
quantum meruit claim are: (1) a benefit conferred upon the defendant by the
plaintiff; (2) realization of that benefit by the defendant; and (3) retention by the
defendant of the benefit under conditions that make it unjust for him to retain it
without paying its value." Earthscapes Unlimited, Inc. v. Ulbrich, 390 S.C. 609,
616–17, 703 S.E.2d 221, 225 (2010).
Gary and Garfield point to plans and drawings prepared by the project team,
as well as their expertise, to argue the City retained a benefit from their services.
At oral argument, they focused on the site location and orientation of the hotel that
was eventually used. Additionally, they highlight the deposition of the City's Rule
30(b)(6) representative, the assistant city manager, who admitted the City gave a
rendering of the original project team's proposed hotel to Windsor/Aughtry. It is
unclear what Windsor/Aughtry then did with the rendering, but the City manager
noted the rendering "looks much like the building, the hotel that we presently
have." Additionally, Raymond Garfield, the founding member of Garfield Traub,
stated in his deposition that Gary and Garfield's work "gave [the City] the ability to
distinguish the different financing types, different hotel types" and the City was
"educated significantly by [Gary and Garfield and their] team in all respects."
The circuit court found this was insufficient to create a genuine issue of
material fact, noting it was not enough to say the constructed building "looks like"
the previous rendering, with no further detail as to specific "striking similarities."
Furthermore, there was no evidence Windsor/Aughtry did anything with the plans
or how that directly benefitted the City. The court also rejected the argument that
the City benefitted from the project team's expertise, stating any benefit as to how
these deals should be structured was conferred upon the other project members, not
the City. However, the court of appeals reversed stating, "We do not believe it is
possible to rule as a matter of law that the alleged benefit to the City had no value.
Therefore, we reverse the circuit court's decision to grant summary judgment on
this element of the quantum meruit claim." Stevens, 396 S.C. at 347, 721 S.E.2d at
460.
We agree with the circuit court's finding there was no genuine issue of
material fact as to whether the City retained a benefit. An anecdotal visual
comparison alleging the building Windsor/Aughtry constructed looks similar to the
schematics for Gary and Garfield's proposed hotel and a vague assertion that Gary
and Garfield imparted some knowledge to the City does not suffice to withstand
the mere scintilla standard. There is no other evidence offered that
Windsor/Aughtry used the plans in any way or, even if it did, how that benefitted
the City. Likewise, we are unpersuaded that the City retained a benefit by learning
from Gary and Garfield's expertise. To some extent any dealing with other
professionals is educational, and this is certainly true in the context of business
negotiations. We again, however, fail to find any intrinsic value to the City.
Moreover, even if we were to find the City received some benefit, we find
no evidence any enrichment was unjust. There is no evidence Gary and Garfield
had any reason to expect the City would otherwise compensate them for any work
they performed in the event the project was not completed. As the MOU makes
plain, the parties were aware they were proceeding at risk until the bond financing
closed.
CONCLUSION
Accordingly, we reverse the opinion of the court of appeals and reinstate
summary judgment in favor of the City on the contract claims and on Gary and
Garfield's quantum meruit claim.
TOAL, C.J., BEATTY and KITTREDGE, JJ., concur. PLEICONES, J.,
dissenting in a separate opinion.
JUSTICE PLEICONES: I respectfully dissent and would affirm the decision of
the Court of Appeals as I agree that the circuit court erred in granting the City
summary judgment on S&W's contract claim and on Gary and Garfield's quantum
meruit claim. As explained below, I strongly disagree with that portion of the
majority's opinion that would extend the applicability and scope of the parol
evidence rule.
The parol evidence rule is a substantive rule of law that prohibits the introduction
of evidence to contradict, add to, alter, explain, or vary the terms of an
unambiguous valid written contract. E.g. Garnett v. WRP Enterps., Inc, 380 S.C.
206, 669 S.E.2d 591 (2008). The scope of this rule is limited to evidence of
understandings and negotiations that preceded the making of the complete written
agreement, not post-formation conduct or agreements. 6 Peter Linzer, Corbin on
Contracts § 25.2 (Joseph M. Perillo ed. 2010).
The majority would now expand the reach of the parol evidence rule in two ways.
As explained above, the predicate for the application of the parol evidence rule is a
valid and complete written contract: the majority now proposes to apply the rule to
an incomplete writing. The majority would also expand the scope of the rule and
hold not only that it bars pre-writing understandings of the parties, but all extrinsic
evidence, whether ante- or post-writing. Explaining the effect of this newly
expanded rule, the majority holds that when a writing "unambiguously fails to
create an enforceable agreement," the determination whether that document is a
valid contract is to be made by looking only within the four corners of the
[unambiguously unenforceable] document. In other words, if parties place some
part of their contract in writing, but that writing is insufficient to stand alone as a
contract, then as a matter of law the parties have no contract.
This new rule unintentionally affects the statute of frauds,6 since, for example, no
longer could evidence of part performance satisfy the statute where the written
memoranda did not. E.g. Mims v. Chandler, 21 S.C. 480(1884) (written receipt
insufficient to satisfy statute but part performance allowed court to order specific
performance). Moreover this new rule fundamentally alters the law of contracts in
this State. See e.g. Gladden v. Keistler, 141 S.C. 524, 140 S.E. 161 (1927) (while
holding a receipt was a contract, opinion acknowledges parol evidence rule does
not apply to incomplete written agreements). Further, the majority purports to
6
S.C. Code Ann. § 32-3-10 (2007). See also Corbin, supra at pp. 20-22, "The
Statute of Frauds Compared with the Parol Evidence Rule."
distinguish Conner v. City of Forest Acres, 363 S.C. 460, 611 S.E.2d 905 (2005),
which reiterates and applies the here-to-fore well settled rule that evidence of
conduct is admissible to decide an issue of contract formation. In the majority's
view, Conner asked whether an employee handbook altered the employee's "at-will
employment contract." As I understand Conner, there was no pre-handbook "at-
will employment contract." Instead, the employee's at-will status resulted from
South Carolina's continued recognition of the doctrine of at-will employment, that
is, "employment at-will is presumed absent the creation of a specific contract of
employment." E.g., Barron v. Labor Finders of S.C., 393 S.C. 609, 614, 713
S.E.2d 634, 636 (2011). In my opinion, the majority errs when it holds that
evidence found outside the four corners of an incomplete writing is no longer
admissible to prove the existence of a contract.
I respectfully dissent and would affirm the decision of the Court of Appeals.