Builders FirstSource-Southeast Group, LLC v. Palmetto Trim and Renovation
915 S.E.2d 736
S.C. Ct. App.2025Background
- The case stems from construction defect litigation regarding a large townhome project in South Carolina, where the plaintiffs alleged numerous deficiencies related to water intrusion caused by improper installation of building components.
- Builders FirstSource-Southeast Group, LLC (BFS), a general contractor and material supplier, subcontracted installation and other work to various subcontractors (the respondents in this appeal).
- When sued by the homeowners association, BFS sought contribution and indemnification from its subcontractors via crossclaims and third-party claims, relying on indemnity provisions in its standard form subcontracts.
- The circuit court granted summary judgment in favor of eight different subcontractors, holding that the indemnity provisions in BFS’s contracts were unenforceable under South Carolina law.
- BFS appealed the summary judgment orders, and these appeals were consolidated for review by the South Carolina Court of Appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Application of Clear and Unequivocal Standard | BFS argued the standard didn’t apply because it wasn’t seeking indemnity for its own negligence. | Subcontractors argued the contract language did trigger the standard due to ambiguity and potential indemnity for BFS’s own negligence. | The court held the standard applied and the contracts failed to meet it. |
| Indemnity Clauses Violate Public Policy & Statute | BFS claimed their provisions allowed indemnity only for subcontractor negligence, not BFS’s own. | Subcontractors maintained the contracts required indemnity even for BFS’s sole negligence, violating S.C. Code § 32-2-10 and public policy. | The court ruled the provisions violated public policy and the statute, thus were unenforceable. |
| Collateral Estoppel Applies | BFS argued prior court decisions weren’t final or on point. | Subcontractors asserted identical language had already been ruled unenforceable in earlier final decisions involving BFS. | The court held collateral estoppel barred BFS from relitigating the enforceability issue. |
| Severability and Unconscionability of Contracts | BFS argued any offending provisions could be severed, preserving the enforceable remainder. | Subcontractors asserted the contracts were adhesive, highly oppressive, and so tainted that severance was not a viable remedy. | The court found the contracts unconscionable as a whole and declined to sever provisions. |
Key Cases Cited
- Concord & Cumberland Horizontal Property Regime v. Concord & Cumberland, LLC, 424 S.C. 639 (S.C. Ct. App. 2018) (applies the "clear and unequivocal" standard to indemnification for one’s own negligence)
- Laurens Emergency Med. Specialists, PA v. M.S. Bailey & Sons Bankers, 355 S.C. 104 (S.C. 2003) (contract of indemnity covering one’s own negligence must be expressed in clear and unequivocal terms)
- D.R. Horton, Inc. v. Builders FirstSource - Se. Grp., LLC, 422 S.C. 144 (S.C. Ct. App. 2018) (indemnification provision unenforceable if it requires indemnity for indemnitee’s own negligence in violation of public policy)
- Simpson v. MSA of Myrtle Beach, Inc., 373 S.C. 14 (S.C. 2007) (addressing unconscionability and contracts of adhesion)
- Damico v. Lennar Carolinas, LLC, 437 S.C. 596 (S.C. 2022) (clarifies standard for unconscionability and contracts of adhesion)