Concord & Cumberland Horizontal Prop. Regime v. Concord & Cumberland, LLC
819 S.E.2d 166
S.C. Ct. App.2018Background
- Concord and Cumberland Regime sued for water intrusion/defective windows and doors; Superior (general contractor) settled underlying claims and sought indemnity from subcontractor Muhler.
- Superior hired Muhler under a 2006 Subcontract for window/door installation containing Article 12.1 indemnity language; in 2007 the parties executed a separate Agreement addressing remediation and containing an "unconditional" indemnity clause (paragraph 11).
- Superior paid $775,000 in settlements and about $630,000 in defense fees, then moved for partial summary judgment seeking contractual indemnity from Muhler for those amounts.
- Muhler moved for summary judgment contending neither the Subcontract nor the 2007 Agreement clearly and unequivocally obligated Muhler to indemnify Superior for Superior’s own negligence.
- The circuit court granted Muhler partial summary judgment, holding neither agreement met the heightened "clear and unequivocal" standard to indemnify an indemnitee for its own negligence; Superior appealed.
Issues
| Issue | Plaintiff's Argument (Superior) | Defendant's Argument (Muhler) | Held |
|---|---|---|---|
| Whether court erred by conflating sole vs concurrent negligence when applying the clear-and-unequivocal standard | Superior: seeking indemnity only for its concurrent negligence, so ordinary contract construction (not heightened standard) should apply | Muhler: clear-and-unequivocal standard applies whenever indemnitee seeks indemnity for its own negligence, sole or concurrent | Held: clear-and-unequivocal applies to claims for an indemnitee's negligence whether sole or concurrent; court did not err |
| Whether Article 12.1 of the Subcontract requires Muhler to indemnify Superior for Superior's concurrent negligence | Superior: broad language + the clause’s final phrase show intent to indemnify Superior for concurrent negligence | Muhler: the limiting phrase "to the extent caused..." confines indemnity to losses caused by Muhler; clause is not clear and unequivocal | Held: Article 12.1 is broad but the phrase "to the extent caused..." limits Muhler’s obligation to losses caused by Muhler; not clear and unequivocal to cover Superior's own negligence |
| Whether the 2007 Agreement’s "unconditional" indemnity ("all damages") supersedes/expands the Subcontract indemnity to cover Superior's negligence | Superior: 2007 Agreement altered Subcontract and replaced limiting language, so Muhler must indemnify "all damages" including those from Superior's concurrent negligence | Muhler: the 2007 Agreement expressly did not amend parties’ rights except as stated; paragraph 11 still lacks clear-and-unequivocal language covering indemnitee negligence | Held: The 2007 Agreement does not clearly and unequivocally show intent to indemnify Superior for its own negligence; court properly construed the agreements separately |
| Whether the two contracts should be merged/rewritten to create an indemnity covering Superior's negligence | Superior: the two documents should be read together to expand indemnity | Muhler: merging would rewrite contracts beyond their terms; no express language altering Subcontract indemnity | Held: Courts must not rewrite or merge inconsistent provisions; absent explicit replacement language, each agreement stands on its terms |
Key Cases Cited
- Laurens Emergency Med. Specialists, P.A. v. M.S. Bailey & Sons Bankers, 355 S.C. 104 (2003) (requires strict construction; indemnity for indemnitee’s own negligence must be clear and unequivocal)
- Fed. Pac. Elec. v. Carolina Prod. Enters., 298 S.C. 23 (1989) (broad indemnity language does not necessarily disclose intent to cover indemnitee’s own negligence)
- Ashley II of Charleston, L.L.C. v. PCS Nitrogen, Inc., 409 S.C. 487 (2014) (explains deterrence policy underlying the negligence/clear-and-unequivocal rule)
- Campbell v. Beacon Mfg. Co., 313 S.C. 451 (1993) (contractual indemnity construed under contract rules but clear language required to cover indemnitee negligence)
- Montgomery v. CSX Transp., Inc., 376 S.C. 37 (2008) (summary judgment standard applied on appeal)