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2004-UP-338 - Whitsett Corp. v. Norbord South Carolina, Inc.

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Lynn Whitsett Corporation,        Appellant,

v.

Norbord South Carolina, Inc., and Callidus Technologies, Inc., Defendants, Of Which Callidus Technologies, Inc., is,        Respondent.


Appeal From Laurens County
James W. Johnson, Jr., Circuit Court Judge


Unpublished Opinion No. 2004-UP-338
Submitted March 8, 2004 – Filed May 18, 2004


AFFIRMED


Joseph W. Hudgens, of Newberry, and Warner R. Wilson, Jr., of Atlanta, for Appellant. 

Boyd B. Nicholson, Jr., of Greenville, for Respondents.

PER CURIAM:  Lynn Whitsett Corporation brought this action against Norbord South Carolina, Inc. and Callidus Technologies, Inc. for breach of contract, foreclosure of a mechanic’s lien, and quantum meruit.  Callidus counterclaimed for breach of contract and breach of warranties.  The trial court found for Lynn Whitsett on its breach of contract claim, but concluded Callidus was entitled to an offset for delays and recovery on its breach of warranties claims.  The resulting net judgment was in favor of Callidus.  Lynn Whitsett appeals.  We affirm. [1]

FACTS

Norbord hired Callidus as its general contractor to build a pressboard plant.  Callidus subcontracted with Lynn Whitsett to install ceramic refractory materials to the walls of Norbord’s kilns.  Lynn Whitsett’s contract contained a fixed price for the installation project.  However, in the event of a change in the scope of the work, the contract converted to one based on time and materials.  It also stated Callidus would provide a particular type of refractory material to be used in the installation.  Instead, Callidus supplied a slightly different product.  Lynn Whitsett applied the ceramics using a gunning crew to spray them onto the kiln walls and a casting crew to pour the material into prepared forms.  Delays arose when the refractory material did not set up properly with the result that the entire application process took fifteen weeks instead of the eight weeks stated in the contract. 

Lynn Whitsett claimed it was owed $84,472.20 under the contract because the application required significant extra labor.  When Callidus refused to pay, Lynn Whitsett brought this action.  Callidus filed a bond to discharge the mechanic’s lien and agreed to indemnify Norbord for any amounts due Lynn Whitsett. 

Lynn Whitsett amended its complaint to argue the scope of its work had been increased because Callidus supplied a different refractory material than had been proposed in the contract.  Lynn Whitsett claimed this change converted the contract from one with a fixed price to one based on time and materials.  Callidus counterclaimed alleging breach of express and implied warranties based on faulty workmanship. 

The trial court agreed with Lynn Whitsett that the contract was converted from a lump sum payment to one based on time and materials with a balance due of $272,498.60.  However, the court determined Lynn Whitsett was responsible for four weeks of delays and gave Callidus a substantial setoff of $179,307.12.  The court also found Lynn Whitsett breached implied and express warranties and set damages at $114,342.79, finally awarding judgment for Callidus in the amount of $21,151.31.  Based on these findings, the court concluded Callidus prevailed in the mechanic’s lien action and awarded attorney’s fees in the amount of $71,714.41. 

DISCUSSION

An action for breach of contract seeking money damages is an action at law.  Sterling Dev. Co. v. Collins, 309 S.C. 237, 240, 421 S.E.2d 402, 404 (1992).  An action to foreclose a mechanic’s lien is also an action at law.  Adams v. B & D, Inc., 297 S.C. 416, 420, 377 S.E.2d 315, 317 (1989).  In an action at law, on appeal of a case tried without a jury, the findings of fact of the judge will not be disturbed upon appeal unless found to be without evidence which reasonably supports those findings.  Townes Assocs. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976). 

I.  Four-Week Delay

Lynn Whitsett contends the trial court erred by granting Callidus a set-off after determining Lynn Whitsett was responsible for a four-week delay in completing its work.  Lynn Whitsett claims there is no evidence in the record to support the trial court’s conclusion, and maintains Callidus caused the delays by supplying substitute refractory materials and by failing to properly prepare and install items prior to the application of the ceramics.  We disagree. 

On appeal, this court cannot weigh conflicting evidence in a law case.  Only if there is no conflicting evidence may we find error as a matter of law.  Hibernian Soc’y v. Thomas, 282 S.C. 465, 469, 319 S.E.2d 339, 342 (Ct. App. 1984).  Although the record contains evidence that Callidus may have been responsible for some delays, it also contains evidence that Lynn Whitsett caused the four-week delay.  In a letter to Callidus with the heading “Subject:  Explanation for extra work invoice,” beneath a subsection marked “Other problems that caused delays or additional work:” a Lynn Whitsett representative wrote:

It was never Lynn Whitsett’s intention to cast the SCC in any other method but to pump them.  This was an oversight on my part when I read the SK-1 sheet that you sent me before starting of this job that stated that Kricon 28 would be used.  I assumed after other conversations that I had with you and Elton, that pumping of the SCC was the only cost effective way of installation.  This will require an additional four weeks of work to do this in the manner that you want it, one bucket at a time.  Again, this was not quoted that way. 

(Emphasis added.)

When questioned about the letter during cross examination, the representative admitted his oversight caused the delay.  Accordingly, we conclude there was evidence to support the trial court’s finding that Lynn Whitsett was responsible for four weeks of the delay and the corresponding award of a set-off in favor of Callidus. 

II.  Calculating the Set-off Amount

Lynn Whitsett further contends the amount of the set-off is unsupported by the evidence.  We disagree. 

The evidence supporting a damages award should be such that the court can determine the amount with reasonable certainty or accuracy.  See Gray v. Southern Facilities, Inc., 256 S.C. 558, 570, 183 S.E.2d 438, 444 (1971).  However, proof to a mathematical certainty of the amount of loss or damage is not required.  Whisenant v. James Island Corp., 277 S.C. 10, 13, 281 S.E.2d 794, 796 (1981). 

In making the set-off award of $179,307.12, the trial court relied on Lynn Whitsett’s own exhibit detailing three weeks of estimated labor costs for one of its crews.  The total cost came to $138,938.16 or, by extrapolation, as much as $185,250.88 for four weeks.  Lynn Whitsett contends this reliance was misplaced because the exhibit details costs for a gunning crew and not a casting crew of the sort used during the four-week delay.  This distinction is insignificant.  Both crews were engaged in the same tasks and employed nearly the same number of men, with a gunning crew employing eight and a casting crew eight or nine.  As such, we find the trial court properly considered Lynn Whitsett’s exhibit as evidence in determining the amount of the set-off. 

Additionally, we note Lynn Whitsett estimated its total cost for the full 15 to 16 weeks at $670,112.60.  A four-week delay would then equate to between $167,528.16 and $178,696.68.  Accordingly, we find the evidence presented amply supports the set-off amount of $179,307.12. 

III.  Breach of Express Warranty

Lynn Whitsett contends the trial court erred by awarding Callidus damages on its counterclaim for breach of express warranty.  It insists the contract’s warranty provision applied exclusively to goods purchased through the purchase order and did not cover the installation of the ceramic refractory material.  We disagree. 

An express warranty is created when a seller makes an affirmation or promise to the buyer which relates to the goods and becomes part of the basis for the bargain that those goods will conform to the affirmation or promise.  See S.C. Code Ann. § 36-2-102 (2003) (stating the UCC applies to transactions in goods); see also Fields v. Melrose Ltd. P’ship, 312 S.C. 102, 105, 439 S.E.2d 283, 284 (Ct. App. 1993) (“A warranty is created when the seller makes an affirmation with respect to the thing to be sold with the intention that the buyer shall rely on it in making the purchase.”) (citation omitted). 

The contract’s warranty provision defined “goods” to mean “the goods described in this Purchase Order or any amendment hereto . . . and also include[d] any work or services performed under the Contract by Supplier or any of its subcontractors in connection with or incidental to Goods.”  (emphasis added).  We read this language to extend the coverage of the express warranty beyond the raw materials to include the installation of the refractory material. 

An engineer testified the ceramic refractory material installed by Lynn Whitsett should last at least one year if not two or three.  One month after the kilns began operating, the refractory material began to separate from the kiln walls.  Norbord immediately began testing to determine the cause.  Within five months, enough refractory material had dislodged that Lynn Whitsett, at Callidus’ request, returned to perform repairs.  However, refractory material continued to come out of the kilns.  Callidus again asked for repairs in January and May of 2001.  Lynn Whitsett refused, and another company ultimately completed the work. 

Based on our reading of the warranty provision, we find Lynn Whitsett expressly warranted any work or services performed under the contract including the installation of the refractory material.  As such, Lynn Whitsett breached its express warranty when it refused to correct defective installation and make repairs on Norbord’s kilns in January and May of 2001. [2]

IV.  Calculation of Damages

Lynn Whitsett also argues that even if we determine it breached warranties to Callidus, there was no competent evidence to support the amount of the damages award.  Lynn Whitsett contends the repair invoices the court relied on to calculate damages were not properly identified by either the service provider or the recipient payor.  As such, Lynn Whitsett asserts they were inadmissible hearsay.  This issue is not preserved for our review. 

 Callidus produced two invoices from Larkin Furnace, the company that ultimately completed the kiln repairs, as evidence to support its claim for damages arising from Lynn Whitsett’s breach of express and implied warranties.  Norbord paid the invoices, but was fully reimbursed by Callidus.  At trial, Dick Liniger, an engineer for Callidus, explained the invoices. 

When the invoices were offered into evidence, Lynn Whitsett objected on the ground there was no causal link established between the work it performed and the need for repairs.  After additional testimony from Liniger, the court admitted the invoices into evidence.  Lynn Whitsett did not object to the invoices as hearsay.  Neither was there an objection that Liniger was not the appropriate person to testify to the content of the invoices or the necessity of the repairs.  Lynn Whitsett raised this objection for the first time in its motion to alter or amend.  Accordingly, this issue is not preserved for our review.  Patterson v. Reid, 318 S.C. 183, 185, 456 S.E.2d 436, 437 (Ct. App. 1995) (holding a party cannot raise an issue by way of a Rule 59(e) motion which may have been raised at trial). 

V.  Attorney’s Fees

Finally, Lynn Whitsett contends that but for the errors in the trial court’s order, it would be the prevailing party and, consequently, the attorney’s fees award should be reversed in its favor.  We disagree.

Lynn Whitsett’s argument is dependent on a determination it prevailed on its remaining causes of action.  Under our analysis, Callidus remains the prevailing party and is, therefore, entitled to attorney’s fees. 

AFFIRMED.

HUFF and STILWELL, JJ., and CURETON, A.J., concur. 


[1]           We decide this case without oral argument pursuant to Rule 215, SCACR.

[2]           Lynn Whitsett also appeals the trial court’s conclusion that it breached an implied warranty.  However, we need not address this issue in light of our determination that Lynn Whitsett breached an express warranty created by the contract.  See Rule 220(c), SCACR.