762 S.E.2d 696
S.C.2014Background
- In 2003 the City of Columbia and a project team (developers Edens, Garfield, Gary; architect Stevens & Wilkinson (S & W); Turner; underwriter Salomon) signed an MOU outlining a framework to develop a publicly-funded hotel and contemplated multiple future "definitive" agreements (Development Management, Design/Build, management, bond financing).
- The MOU stated it "reflects the intent to proceed in good faith to execute definitive written agreements" and expressly provided the City would have no liability if it determined the project was not feasible.
- The MOU allocated interim costs to the Project Team, tied S & W/Turner payment to successful bond closing, and provided Project Team studies would become City property; many material terms (scope, final budget, liability caps, payment mechanics) were left to later agreements.
- Negotiations continued, Turner produced a GMP, the City approved interim funding for S & W design work, and the contemplated bond amount rose from about $60M to over $72M; the City later cancelled the public project and selected a private developer who built the hotel.
- S & W sued for breach of contract and promissory estoppel; Gary and Garfield sued for quantum meruit and later breach of contract; the circuit court granted summary judgment for the City, the court of appeals reversed in part, and the Supreme Court granted certiorari.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the MOU is a binding contract | MOU sets forth complete understandings and mutual promises; parties intended to be bound | MOU is nonbinding agreement to agree; material terms were left for future definitive agreements | MOU is unenforceable as a matter of law — agreement to agree, no meeting of minds on material terms |
| Whether parol/extrinsic evidence may be considered to show a contract existed | Extrinsic evidence (conduct, negotiations, partial performance) can show intent and formation | Where writing unambiguously indicates nonbinding intent, analysis is limited to four corners; parol evidence cannot contradict that | Court restricted extrinsic evidence because the MOU’s language unambiguously contemplated future definitive agreements |
| Whether Gary & Garfield conferred a benefit on the City (quantum meruit) | Plans, drawings, renderings, and expertise educated the City and influenced site/orientation; City shared rendering with later developer | Alleged similarities are anecdotal and speculative; no proof Windsor/Aughtry used the plans or City realized a measurable benefit; parties proceeded at risk per MOU | No genuine issue of material fact on benefit/ unjust enrichment; summary judgment for City reinstated |
| Whether any enrichment was unjust (quantum meruit) | Expectation that City would compensate for work if project failed | MOU expressly allocated risk to Project Team until bond closing; no reasonable expectation of payment absent financing or Development Agreement | No evidence of unjust enrichment; City not liable under quantum meruit |
Key Cases Cited
- Miles v. Miles, 393 S.C. 111 (interpretation of clear, unambiguous agreements limited to the writing)
- Jordan v. Security Group, Inc., 311 S.C. 227 (plain contract language governs when unambiguous)
- Gladden v. Keistler, 141 S.C. 524 (parol evidence not admissible to add terms to a writing that imports to be a complete expression)
- Aperm of S.C. v. Roof, 290 S.C. 442 (preliminary agreement enforceable where sufficient guidelines and essential terms were fixed)
- Earthscapes Unlimited, Inc. v. Ulbrich, 390 S.C. 609 (elements of quantum meruit/unjust enrichment)