Fountain v. Fred's, Inc.

436 S.C. 40

871 S.E.2d 166

Martha M. FOUNTAIN and Curtis Fountain, Plaintiffs,

v.FRED'S, INC. and Wildevco, LLC, Respondents,

v.Tippins-Polk Construction, Inc. and Rhoad's Excavating Services, LLC, Third-Party Defendants,of whom Tippins-Polk Construction, Inc. is the Petitioner.

Appellate Case No. 2020-000651

Opinion No. 28086

Supreme Court of South Carolina.

Heard December 9, 2021

Filed March 2, 2022

Morgan S. Templeton, of Wall Templeton & Haldrup, PA, of Charleston, for Petitioner Tippins-Polk Construction, Inc.

Matthew Clark LaFave, of Crowe LaFave, LLC, of Columbia, for Respondent Fred's, Inc.

Randi Lynn Roberts and Regina Hollins Lewis, both of Gaffney Lewis LLC, of Columbia, for Respondent Wildevco, LLC.

JUSTICE KITTREDGE :

We issued a writ of certiorari to review the court of appeals’ decision affirming the trial court's finding that Respondents Fred's, Inc. (Fred's) and Wildevco, LLC (Wildevco) were entitled to equitable indemnification from Petitioner Tippins-Polk Construction, Inc. (Tippins-Polk). Specifically, Tippins-Polk argues the court of appeals erred in finding a special relationship existed between it and Fred's and in finding Respondents proved they were without fault as to the underlying premises liability claim. Because we find Respondents failed to establish they were without fault in the underlying action, we reverse.

I.

Respondent Fred's was a Tennessee corporation that operated a chain of discount general merchandise stores in several states, including South Carolina. Respondent Wildevco is a South Carolina limited liability company that owned a tract of undeveloped commercial property in Williston, South Carolina.

In February 2005, Wildevco and Fred's entered into a lease agreement in which Wildevco agreed to construct a 16,000-square-foot commercial space located in Williston, South Carolina, according to Fred's conceptual design specifications. In turn, Fred's agreed to lease the property for ten years.

Wildevco, and specifically partner Tad Barber, managed the construction process, including hiring engineers, architects, and a general contractor. In April 2005, Wildevco entered into a contract with general contractor Tippins-Polk for the construction of the Fred's store and adjoining strip center. Barber testified at trial that he selected Tippins-Polk as the general contractor primarily because Tippins-Polk offered a "good price" but also because Tippins-Polk had experience constructing other Fred's stores.

The construction contract between Wildevco and Tippins-Polk included drawings prepared by an architect, as well as site plans prepared by an engineer. The contract specifically stated that Tippins-Polk was responsible for "All Site Work," including "[g]rading, concrete curbing, utilities & paving [p]er site plans."

Wildevco provided Tippins-Polk with two sets of construction drawings—the architectural drawings, which established the design elements including the sidewalk surrounding the store, and the site plans, which controlled the grading, elevations, pavement, and underground utilities. However, there was conflicting evidence at trial as to the intended design of the curbing at the entrance of the Fred's store—specifically, whether the architectural drawings and/or site plans called for the presence of a curb ramp for wheelchair accessibility. In any event, Tippins-Polk constructed the entrance to have a curb ramp at the entrance door. In front of the door, the ramp was flush with the parking lot, and on either side, it sloped upward to adjoin the rest of the curbing surrounding the building. Fred's opened the Williston store in October 2005.

Pursuant to the lease agreement between Wildevco and Fred's, Wildevco was the party responsible for "keep[ing] and repair[ing] the exterior of the [ ] Premises, including the parking lot, parking lot lights, entrance and exits, sidewalks, ramps, curbs," and various other exterior elements. Fred's was responsible for maintenance of the interior of the premises.

Wildevco claimed it periodically inspected the parking lot and parking lot lighting but never conducted or hired anyone to conduct an inspection around the perimeter of the store to look for tripping hazards.

However, Barber acknowledged that if an inspection had taken place, it would have been "vis[ible] to the naked eye" that an elevation change in the sidewalk existed and was not painted yellow.

Five years after the Fred's store opened, on March 10, 2010, Martha Fountain went to the Williston Fred's to purchase light bulbs. It was a sunny day, and as she approached the store entrance around noon, her toe caught the sloped portion of the ramp at the entrance of the store, causing her to trip and fall. Ms. Fountain hit her head and hand on the glass door and fell to her knees. She sustained serious injuries to her hand, wrist, and arm and has undergone five surgeries to alleviate her pain and injuries. Ms. Fountain also suffered nerve damage in her shoulder and neck from the blow to her head, and she continues to have problems lifting and gripping things due to numbness and neuropathy in her right hand, which is her predominant hand.

In May 2010, Ms. Fountain and her husband filed a premises liability suit against Fred's and Wildevco, alleging Respondents breached their duty to invitees by failing to maintain and inspect the premises and failing to discover and make safe or warn of unreasonable risks. Ms. Fountain sought to recover her medical expenses and lost wages, and her husband filed a loss of consortium claim. The Fountains did not pursue a construction defect claim against Tippins-Polk.

In defending the Fountains’ premises liability lawsuit, Wildevco and Fred's filed third-party claims against Tippins-Polk for equitable indemnification, negligence, breach of contract, and breach of warranty, arguing Tippins-Polk improperly constructed the sidewalk and that the defective construction was the sole proximate cause of Ms. Fountain's injuries. The case was set for a date certain trial in March 2016. On the eve of trial, Wildevco and Fred's settled with the Fountains for $290,000, with Wildevco paying $250,000 and Fred's paying $40,000. The third-party claim was continued, and in June 2016, a bench trial was held solely on Fred's and Wildevco's equitable indemnification claims against Tippins-Polk.

The general theory of the third-party claim was that Tippins-Polk deviated from the site plans and improperly constructed the entrance curbing, which was the sole proximate cause of Ms. Fountain's injuries. In other words, Fred's and Wildevco sought to re-classify the dangerous condition as "improper construction" rather than an unsafe elevation change in a premises liability context, which was the basis of Ms. Fountain's lawsuit. Essential to Respondents’ position is the notion that they did not breach any duty to Ms. Fountain to inspect the premises and correct or warn of any potential trip hazards.

At the conclusion of the trial, the court noted there were "potential areas of confusion" between the various construction drawings but ultimately concluded Tippins-Polk deviated from the site plans in building an elevated sidewalk with a sloped curb ramp. As to the relevant elements of equitable indemnification, the trial court found a special relationship existed between Fred's and Tippins-Polk "based on Tippins-Polk's agreement to construct a facility for a Fred's retail store with knowledge that the Fred's facility would be open for business to the public, as well as its selection as general contractor based on its prior construction of at least one other Fred's store." Relying exclusively on construction defect cases rather than cases involving premises liability or equitable indemnification, the trial court further concluded neither Wildevco nor Fred's breached any duty owed to Ms. Fountain regarding inspection and maintenance because "the defects were such that could not reasonably have been discovered" by Wildevco or Fred's.¹

Thus, the trial court concluded equitable indemnification was appropriate.

The court of appeals affirmed, finding "ample evidence of a special relationship" between Tippins-Polk and Fred's and concluding neither Fred's nor Wildevco were at fault in the underlying action. Fountain v. Fred's, Inc. , 429 S.C. 533, 839 S.E.2d 475 (2020). Following the court of appeals’ denial of Tippins-Polk's petition for rehearing, this Court granted Tippins-Polk's petition for a writ of certiorari.

II.

In an action at equity, tried by a judge alone, this Court's standard of review is de novo. Lewis v. Lewis , 392 S.C. 381, 385–86, 709 S.E.2d 650, 651–52 (2011). In short, "[w]e have jurisdiction in appeals in equity to find the facts in accord with our view of the preponderance or greater weight of the evidence, in the absence of verdict by jury." Gilbert v. McLeod Infirmary , 219 S.C. 174, 184, 64 S.E.2d 524, 528 (1951).

"South Carolina has long recognized the principle of equitable indemnification." Vermeer Carolina's, Inc. v. Wood/Chuck Chipper Corp. , 336 S.C. 53, 60, 518 S.E.2d 301, 305 (Ct. App. 1999). "Indemnity is that form of compensation in which a first party is liable to pay a second party for a loss or damage the second party incurs to a third party." Id. (citation omitted). "A right to indemnity may arise by contract (express or implied) or by operation of law as a matter of equity between the first and second party." Id. (citation omitted).

"Traditionally, courts have allowed equitable indemnity in cases of imputed fault or where some special relationship exists between the first and second parties." Id. An additional element is the absence of fault by the party seeking equitable indemnification. A party is not entitled to equitable indemnification if any "negligence of his own has joined in causing the injury." Id. (citation omitted).

Thus, after demonstrating a sufficient relationship exists, a party seeking equitable indemnification (here, Fred's and Wildevco) must...