Contract – Contractual Indemnity – Statute of Limitations

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The circuit court did not err in in finding Builders FirstSource-Southeast Group seeks indemnification for its own negligence.

We affirmed the circuit court’s order in part, vacated in part, and remanded.

Builders FirstSource-Southeast Group (BFS) appealed an order granting summary judgment, arguing the circuit court erred in applying a “clear and unequivocal” standard to the analysis of its contractual indemnity language and in finding its claims against certain subcontractors were barred by the statute of limitations.

In developing a residential community in Berkeley County, Lennar Carolinas contracted with BFS to provide and install windows and doors with associated weatherproofing, flashing, and other necessary components. Respondents, BFS subcontractors ECC Contracting, LLC and Charleston Exteriors, LLC, installed the windows at the location. In 2008, BFS entered a Master Subcontractor Agreement with ECC. BFS entered an identical Agreement with Charleston Exteriors in 2012. In 2014, Patricia Damico and other property owners in the location brought construction defect litigation against Lennar and others (the Damico litigation). In 2015, the property owners amended their complaint to add claims related to the exterior windows. Lennar brought third-party claims against various subcontractors, including BFS. Lennar’s action against BFS included claims for indemnification, breach of warranty, breach of contract, negligence, and products liability. In 2018, BFS filed this action claiming Respondents were responsible for “provision of materials and/or services in connection with the installation of the windows and doors of the subject structures” at the location and sued them for equitable indemnification, contractual indemnification, breach of warranty, breach of contract, negligence, and contribution.

In 2019, BFS moved to consolidate this matter with Damico, asserting the facts in controversy were identical and the cases involved common questions of law. ECC argued BFS’s claims were barred by the statute of limitations applicable to contract claims. ECC further challenged BFS’s contractual indemnity claims as meritless under the “clear and unequivocal” standard and alternatively argued BFS lacked standing because its claims were unripe. The circuit court granted Respondents summary judgment on BFS’s claims for negligence, breach of contract, breach of warranty, and contractual indemnification. The circuit court found the Agreement’s indemnification provisions were neither clear nor unequivocal; thus, BFS could not seek contractual indemnification from Respondents for its own negligence, whether concurrent or sole. The circuit court further found BFS’s claims for contractual indemnification, negligence, breach of contract, and breach of warranty were barred by the applicable statute of limitations because BFS filed its action against the subcontractors more than three years after receiving notice of its potential claims. As BFS’s remaining non-indemnity claims were not separate and distinct from the claims made in Damico, the circuit court granted summary judgment on this ground as well. The circuit court found BFS’s claims for equitable indemnification and contribution should be consolidated with Damico, which at the time of the circuit court arguments had been stayed.

Among other things, BFS argued the circuit court erred in applying a heightened standard to the Agreement’s indemnity language because BFS does not seek indemnification for its own negligence. BFS further contended that in granting summary judgment, the circuit court implicitly found Respondents were not negligent. We disagreed. Our review of BFS’s complaint demonstrates it seeks to be indemnified for its concurrent—and perhaps sole—negligence. BFS asserts several times in its complaint that it seeks recovery for any sums for which it may be held liable to Lennar or the Damico plaintiffs, rather than only those sums which might be attributable to Respondents’ purported sole negligence. For this reason—and due to the language of BFS’s own Agreement—the circuit court did not err in in finding BFS seeks indemnification for its own negligence.

BFS next asserted the circuit court erred in finding the statute of limitations on its contractual indemnity claims began to run before it made any payment in the Damico litigation and before final judgment was entered against it. We agreed. The circuit court erred in finding BFS’s claims were barred by the statute of limitations because when BFS answered Lennar’s third-party complaint in 2015, it had neither been found liable nor paid any injured party. Accordingly, we vacated the circuit court’s statute of limitations findings.

Affirmed in part, vacated in part, and remanded.

Builders FirstSource-Southeast Group LLC v. MI Windows and Doors Inc. (Lawyers’ Weekly No. 012-012-25, 7 pp.) (Stephanie P. McDonald, J.) Appealed from Berkeley County Circuit Court (Clifton Newman, J.) Stephen P. Hughes and William Hewitt Cox, III, both of Howell Gibson & Hughes, PA, of Beaufort, for Appellant; James H. Elliott, Jr. and Francis Heyward Grimball, both of Richardson Plowden & Robinson, PA, and L. Dean Best and Mark Shanter Chaparro, both of Best Law, P.A., all of Mount Pleasant, for Respondent ECC Contracting, LLC; Derek Michael Newberry, of Hall Booth Smith, PC, of Mount Pleasant, for Respondents MI Windows and Doors, Inc. and Hurley Services, LLC; Christopher Clay Olson, of Gordon & Rees, LLP of Charleston, for Respondent Charleston Exteriors, LLC. South Carolina Court of Appeals Unpublished