Contracts – Construction Defect – Jury Instructions – Set-off of Jury Verdict

Defendants assumed responsibility for completing construction of plaintiff’s residential development. Defendants noted existing water leak damage and attempted repairs. However, several years later, homeowners began reporting water intrusion during heavy rains. Plaintiff filed suit against defendants and the original construction company and obtained a $5 million verdict against all parties. Defendant appealed, challenging various jury instructions and the partial set-off from the verdict. Because it was the jury’s sole province to determine that each cause of action independently supported the entire verdict, the trial court erred in amending the verdict to so hold and improperly apportioned settlement proceeds as a set-off.

We affirm the trial court’s jury instruction and denial of defendants’ directed verdict motions, along with the trial court’s finding of a single business enterprise among defendants; however, we reverse the partial set-off of the jury’s verdict.

Bostic Brothers Construction, Inc. began construction of plaintiff’s townhouse community. Bostic ultimately had to abandon the project, selling the community to IMK Development Company; defendants took over construction responsibilities. Plaintiff filed suit against Bostic, IMK, and defendants, alleging negligence and breach of implied warranties and fiduciary duties, and obtained a judgment against defendants. Post-trial proceedings allocated fault and set-off settlement funds. On appeal, defendants challenged various jury instructions, the denial of its motions for directed verdict, the trial court’s amalgamation of defendants’ interest under a single business enterprise theory, and the trial court’s partial set-off of the jury’s verdict.

We first affirm the trial court’s jury instructions. We rule that the trial court was not obligated to instruct the jury that defendants could be held liable only for work they performed, nor did it err in charging the jury on breach of the implied warranty of habitability or in failing to give defendants’ requested charge on breach of fiduciary duty.

We also rule that the trial court properly amalgamated defendants’ interest with IMK because the record contained evidence of a unified business operation between defendants and IMK through self-dealing and blending of enterprises.

However, we rule that the trial court’s entry of judgment did not comport with the jury’s verdict, since the trial court amended the verdict to find that each cause of action independently supported the full $5 million verdict. We hold that such a decision is for the jury, not the trial court, to make. Finally, we rule that any settlement proceeds could not be set off against the breach of fiduciary duty claim and should be apportioned 75 percent to the negligence claims and 25 percent to the breach of implied warranty claim, pursuant to the jury’s award of damages.  

Affirmed in part and reversed in part.

Stoneledge at Lake Keowee Owners’ Association v. IMK Development. Co., LLC (Lawyers Weekly No. 011-091-18, 21 pp.) (Lockemy, J.) Appealed from Oconee County Circuit Court (Alexander S. Macaulay, J.) Jason Michael Imhoff, Chad McQueen Graham, and Carl Reed Teague for appellants. Robert T. Lyles, Jr. for respondent. S.C. App. Ct.