Stoneledge at Lake Keowee v. IMK Development Co., LLC
28071
| S.C. | Dec 8, 2021Background
- Stoneledge is a Lake Keowee townhome development; Phase I (37 units) suffered pervasive water-intrusion defects discovered after several developer/contractor changes.
- IMK (comprised of IK and Marick) purchased the project; Marick Home Builders (Thoennes) completed Phase I and controlled many project operations; homeowners formed the HOA and later sued for repair costs.
- After a two-week trial the jury awarded: $3,000,000 (negligence against Bostic and IMK/Marick), $1,000,000 (breach of implied warranty against Bostic and Marick), and $1,000,000 (breach of fiduciary duty against IMK, IK, Thoennes, Lollis, Cox).
- The trial court sua sponte reformed each verdict to $5,000,000 and applied apportionment and setoff for $2,855,911.77 in settlements; parties appealed and the court of appeals issued two opinions (Stoneledge I & II).
- The South Carolina Supreme Court affirmed the trial court on jury charge and denial of directed verdicts, reversed the court of appeals on amalgamation (single business enterprise), modified damages calculations (including setoff and apportionment), and remanded for entry of final judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jury charge: scope of liability and habitability instruction | Trial court's instructions were proper and any objections waived | Marick: should have been charged liability limited to work it performed; habitability instruction improper | Affirmed court of appeals; no reversible error in jury charge or preservation ruling |
| Directed verdicts (negligence & warranty) | Evidence supported submitting negligence and implied warranty claims to jury | Marick: insufficient evidence for liability; directed verdict required | Denial of directed verdicts affirmed; sufficient evidence to go to jury |
| Amalgamation / single business enterprise | HOA: IMK, Marick, Thoennes operated as a single enterprise and engaged in self-dealing; remedy needed to reach assets | Marick/Thoennes: LLC form respected; no bad faith or injustice to justify amalgamation; cannot amalgamate individual with company | Reversed court of appeals; HOA failed to prove requisite bad faith/wrongdoing; single business enterprise not applied; cannot amalgamate individual with entity |
| Damages, verdict reformation, setoff & apportionment | HOA: single injury (repair cost) => verdicts cumulative; trial court properly reformed awards to $5M each and applied setoff/apportionment | Defendants: trial court invaded jury province by reforming verdicts; setoff/apportionment must be applied correctly; fiduciary award not subject to setoff | Trial court erred in reforming verdicts absent jury clarification; breach of fiduciary duty award not subject to setoff (statutory exception); setoff applied pro rata to negligence and warranty verdicts; final judgments recalculated and remanded |
Key Cases Cited
- Pertuis v. Front Roe Rests., Inc., 423 S.C. 640 (2018) (recognizes and refines single business enterprise theory; requires intertwining plus bad faith/wrongdoing)
- SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444 (Tex. 2008) (enumerates nonexclusive factors for single business enterprise analysis)
- Kincaid v. Landing Dev. Corp., 289 S.C. 89 (Ct. App. 1986) (early recognition of amalgamation theory in South Carolina)
- Oskin v. Johnson, 400 S.C. 390 (2012) (equitable claims reviewed de novo; trial court credibility considered)
- Riley v. Ford Motor Co., 414 S.C. 185 (2015) (discusses Uniform Contribution Among Tortfeasors Act and the legislative policy favoring setoff/settlement)
- Smith v. Widener, 397 S.C. 468 (2012) (reiterates rule that there can be only one satisfaction for an injury; courts must avoid double recovery)