821 S.E.2d 509
S.C. Ct. App.2018Background
- Stoneledge, a townhouse development, was started by Bostic in 2002; Bostic abandoned the project in 2004 with unfinished interiors and reported defects (water intrusion, deck/porch leaks, hidden rot).
- IMK bought the project in 2005; Marick Home Builders (Marick) took over construction/repairs and pulled permits for ~$1.4 million of completion/repair work; Marick board members (including Rick Thoennes) initially controlled the HOA and later turned it over to homeowners (2008).
- Homeowners later discovered extensive water damage and sued Bostic, IMK, Marick, and individual board members asserting negligence, breach of implied warranty of workmanlike service, breach of implied warranty of habitability (dismissed pretrial), and breach of fiduciary duty. Jury sought ~$6.3M; returned $5M across causes (negligence, implied warranty, fiduciary duty).
- Post-verdict proceedings allocated fault and addressed setoffs for prior settlements; trial court entered amended judgments allocating particular dollar amounts to causes and defendants; appeal followed by Marick and Thoennes.
- The court affirmed most trial rulings (jury charges, denial of directed verdicts, fiduciary-duty charge under Dunes West framework) but reversed the trial court’s post-trial reformation of the jury’s damage allocations and remanded to enter judgment consistent with the jury verdict and correct setoff allocation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jury instructions on liability (liability for prior defects vs. subsequent repairs) | HOA: general negligence and proximate-cause instructions were sufficient to hold parties liable for harms they caused. | Marick: jury should be charged that a subsequent builder/repairer is liable only for damages caused by its repairs (Roundtree Villas rule). | Court: preserved Marick's proffer; but overall charge adequately instructed proximate-cause and negligence allocation, so no reversible error. |
| Jury instruction on implied warranty of habitability (dismissed pretrial) | HOA: harmless—verdict form did not include habitability; passing reference caused no prejudice. | Marick: court erroneously charged habitability even though claim was dismissed. | Court: stray reference harmless; no prejudice shown. |
| Directed verdict / proximate cause (Marick’s liability and extent) | HOA: evidence (permits, repairs performed, expert testimony) showed Marick performed substantial work and proximately caused damages. | Marick: most exterior defects preexisted; limited evidence of defective Marick repairs; at most $250k liability. | Court: denied directed verdicts; evidence created factual issues for jury; jury verdict supported. |
| Amalgamation / single business enterprise (treat Marick and IMK as one) | HOA: entities operated as a unified enterprise; shared personnel, funds, overlapping control—supports piercing. | Marick: trial court failed meaningful analysis; separation should be respected absent bad faith. | Court: evidence supported single-business-enterprise finding (unified operations, shared actors, self-dealing); but trial court’s analysis was thin—appellate court nonetheless found adequate record support. |
| Election of remedies / cumulative damages | HOA: sought cost-of-repair remedy only; no election necessary. | Marick: damages awarded on multiple causes arise from same facts; court should have required election to avoid double recovery. | Court: Marick failed to preserve objection at trial; election not required on appeal. |
| Setoff of prior settlements and post-trial reformation of verdict | HOA: trial court reformed verdict to treat each cause as independently supporting full $5M, then applied setoffs. | Marick: trial court invaded jury’s province by reassigning damages and misallocated setoffs. | Court: reversed that reformation; reinstated jury’s $5M allocation among causes; ordered setoff allocation consistent with jury verdict and law (no setoff against Thoennes’ fiduciary award; remaining settlements applied against $4M portion, with proportional allocation between negligence and warranty and Marick’s share apportioned per jury percentages). |
Key Cases Cited
- Stephens v. CSX Transp., Inc., 415 S.C. 182, 781 S.E.2d 534 (discussing standard and preservation for jury instructions)
- Cole v. Raut, 378 S.C. 398, 663 S.E.2d 30 (trial judge's duty to give requested instructions that correctly state law)
- Roundtree Villas Ass'n v. 4701 Kings Corp., 282 S.C. 415, 321 S.E.2d 46 (subsequent titleholder/repairer liable only for negligent repairs, not original builder's damages)
- Concerned Dunes West Residents v. Georgia-Pacific Corp., 349 S.C. 251, 562 S.E.2d 633 (developer owes fiduciary duty to POA to deliver common areas in good repair)
- Pertuis v. Front Roe Restaurants, Inc., 423 S.C. 640, 817 S.E.2d 273 (single-business-enterprise theory / amalgamation requires more than intertwined operations—evidence of injustice or abuse required)
- Fields v. J. Haynes Waters Builders, Inc., 376 S.C. 545, 658 S.E.2d 80 (builder's implied warranty: home fit for dwelling, workmanlike, free of latent defects)
- Smith v. Widener, 397 S.C. 468, 724 S.E.2d 188 (when prior settlement covers same injury, setoff arises; court must allocate settlements between claims if mixed)
- Hawkins v. Pathology Assocs. of Greenville, P.A., 330 S.C. 92, 498 S.E.2d 395 (no setoff where settlement compensated a different injury)