THE STATE OF SOUTH CAROLINA 

In The Court of Appeals 

James E. Carroll, Jr., Appellant, 

v. 

Isle of Palms Pest Control, Inc., SPM Management 

Company, Inc. and Terminix Service, Inc., Defendants, 

Of which Isle of Palms Pest Control, Inc. and SPM 

Management Company, Inc. are Respondents. 

Appellate Case No. 2019-000797 

Appeal From Charleston County 

Roger M. Young, Sr., Circuit Court Judge 

Opinion No. 6011 

Heard June 16, 2022 – Filed August 9, 2023 

AFFIRMED 

Robert T. Lyles, Jr., of Lyles & Associates, LLC, and 

Jody Vann McKnight, of McKnight Law Firm, both of 

Mount Pleasant; and Rose Beth Grossman Smith, of 

Greenville, all for Appellant. 

Trent M. Kernodle and Stephen Michael Kozick, both of 

Kernodle Coleman, of James Island, for Respondent Isle 

of Palms Pest Control, Inc.; Robert Michael Ethridge, of 

Ethridge Law Group, LLC, and Mary Skahan Willis, 

both of Mount Pleasant, for Respondent SPM 

Management Company, Inc. 
 

 

 

 

 

 

 

 

 

 

VINSON, J.: In this civil action, James E. Carroll, Jr. appeals the circuit court's 

order granting partial summary judgment in favor of Isle of Palms Pest Control, 

Inc. (IOP) and SPM Management Company, Inc. (SPM) (collectively, 

Respondents). Carroll argues the circuit court erred in granting partial summary 

judgment in favor of Respondents as to his negligence claims when (1) the circuit 

court incorrectly held the economic loss rule applied; (2) Respondents owed 

Carroll duties created by the South Carolina Department of Pesticide Regulations 

(SCDPR) and industry standards that were separate and distinct from the contract; 

(3) the circuit court incorrectly limited Carroll's contractual remedy to $250,000; 

(4) by limiting Carroll's claims to breach of contract, the circuit court nullified the 

regulatory mandate requiring pest control applicators to carry insurance for the 

protection of homeowners because breach of contract claims are excluded from 

coverage; and (5) the circuit court's findings of fact and conclusions of law in its 

order denying his motion to reconsider were false and pretextual. We affirm. 

FACTS AND PROCEDURAL HISTORY 

This action arises from an alleged termite infestation and resulting damage to 

Carroll's residence. Carroll purchased 11 Tabby Lane on Isle of Palms (the 

Property) in November 2002. In February 2003, Carroll entered into a termite 

treatment and repair bond agreement (the Termite Contract) with IOP, a company 

owned and operated by Vincent Sottile. According to its terms, IOP was to treat 

the Property for subterranean termites, reinspect annually for infestations, and 

apply any necessary additional treatments, provided Carroll paid the annual 

reinspection fee of $250. Respondents agree that although Carroll did not sign the 

Termite Contract, it was a valid contract that remained in effect from February 

2003 until the filing of this action. In June 2011, SPM was formed and took over 

IOP's termite services at the Property under the Termite Contract. Thereafter, SPM 

sold its assets to Terminix Services, Inc. (Terminix) in May 2013, and Terminix 

assumed the termite services at the Property. According to Carroll, Terminix 

inspected the Property in January 2014 and discovered "substantial live termites 

and termite damage." Carroll claimed Terminix treated the Property at that time 

and that in January 2015, Terminix again discovered and treated for live, active 

termites when it performed its annual reinspection. Carroll hired professional 

contractors to complete an inspection of the Property, and they discovered the 

home was "inundated" with subterranean termites. Carroll claimed this 

demonstrated the treatments were not effective and that Respondents and Terminix 

were responsible for making repairs. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carroll commenced this action against IOP, SPM, and Terminix1 in November 

2015 and filed a second amended complaint on July 27, 2016, asserting claims for 

breach of contract and negligence based on the alleged termite infestation and 

resulting damage to the Property. Carroll alleged IOP and SPM were negligent in 

failing to (1) properly inspect, treat, or apply treatment to the Property; (2) discover 

active termites in the Property; (3) train its employees regarding pest control 

management; (4) comply with South Carolina law and regulations pertaining to 

inspection for and treatment of termites; and (5) use the degree of care and caution 

that a reasonable, similarly situated termite pest management company would use. 

Carroll sought damages including the cost of repair to return the Property to its 

prior condition or, alternatively, for the replacement of the structure and for the 

diminished fair market value of the Property resulting from having to disclose 

termite damage to future potential homebuyers. 

SPM moved for partial summary judgment on February 5, 2019—fourteen days 

before trial was scheduled to start—and argued it was entitled to summary 

judgment as to Carroll's negligence claims because he failed to allege SPM owed 

him any legal duties apart from those set forth in the Termite Contract and such 

claims were therefore barred by the "economic loss rule."2 In addition, SPM 

argued it was entitled to summary judgment on the issue of damages and Carroll's 

damages award was limited to $250,000 as set forth in the Termite Contract. 

According to Carroll, he emailed a copy of his memorandum in opposition to 

SPM's motion for partial summary judgment to the circuit court's law clerk and 

opposing counsel on February 18, 2019—two days before the hearing. Carroll 

included several exhibits with the memorandum, including excerpts of deposition 

testimony from Sottile and Carroll's experts, Cecil Hernandez and Maxcy P. Nolan, 

III. Carroll acknowledged, however, he did not file this submission until February 

22, 2019, two days after the hearing. 

1 Terminix is no longer party to this lawsuit. 

2 See, e.g., Sapp v. Ford Motor Co., 386 S.C. 143, 147, 687 S.E.2d 47, 49 (2009) 

("The economic loss rule is a creation of the modern law of products liability. 

Under the rule, there is no tort liability for a product defect if the damage suffered 

by the plaintiff is only to the product itself. In other words, tort liability only lies 

where there is damage done to other property or personal injury." (citation 

omitted)). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In his memorandum, Carroll argued regulation 27-10833 required a termite 

prevention company to maintain records for two years or the duration of the 

contract, whichever is longer. In addition, he argued regulation 27-1085(D)4 

required all chemicals used on a property to be used according to label instructions 

and documented with a special "Termiticide Disclosure Form." He stated that, 

according to Sottile's deposition, Sottile "decided to stop monitoring and protecting 

[the P]roperty with the Exterra Bait Stations[] and instead . . . applied Termidor 

termiticide to the ground" sometime in 2008. Carroll stated Sottile testified he 

"beaded" termiticide around the Property in 2003 but did not inform Carroll or "file 

the appropriate 'Termiticide Disclosure Form.'" 

Carroll argued the economic loss rule did not apply and he could sue in tort and 

contract. He argued Hernandez's deposition testimony showed the use of 

termiticide treatment did not meet industry standards and that Sottile's trial 

testimony would show the treatment was not "an application according to labeled 

instructions" in violation of the SCDPR regulations. Finally, Carroll argued he 

was entitled to damages up to $250,000 under the contract for each year the 

contract was violated. 

3 See S.C. Code Ann. Regs. 27-1083(C)(3)(b) (2011) ("Records of pesticide 

applications must be maintained by the company, firm, or licensed commercial or 

noncommercial applicator as detailed below: . . . For post-construction 

termite-control treatments, including the installation of bait systems and baits 

containing active ingredients, records of termiticide application must be 

maintained for a period of two (2) years from the date of application or as long as a 

continuing warranty or contract exists, whichever is longer . . . ."). 

4 See S.C. Code Ann. Regs. 27-1085(D) (Supp. 2022) ("The chemicals, methods, 

and systems permitted in the control of termites or other wood-destroying 

organisms shall be only those pesticides which are registered in South Carolina for 

that use. The chemical and control methods must be used in the proper proportions 

and in the quantities and manner directed on the label or in these Standards."); see 

also Regs. 27-1085(D)(6) ("All applications of termiticides, including 

re-treatments and supplemental or 'booster' treatments, must be properly recorded 

on the Record of Termiticide Use form published by [SCDPR] or in an alternative 

manner acceptable to [SCDPR]. These record-keeping requirements for 

termiticide applications apply to bait installations and wood-treatment methods as 

well as to liquid termiticides. These records must be maintained by the firm as 

specified in [regulation] 27-1083[(C)] above and must be presented to the Director 

or his authorized representatives for review and duplication upon their request at 

the expense of [SCDPR]."). 
 

 

 

 

 

 

 

 

 

 

 

 

The circuit court heard SPM's motion for partial summary judgment on February 

20, 2019. During the hearing, IOP stated it joined in SPM's motion on the same 

grounds. SPM argued the case Duc v. Orkin Exterminating Co.,

5 in which the 

South Carolina district court limited a plaintiff's claims to those available under 

contract, supported its position as to Carroll's negligence claims. Carroll argued he 

and IOP entered into an exterior bait station agreement and without telling Carroll, 

IOP undertook a duty separate from the contract "of putting termiticide around the 

home." He acknowledged "it was all related to . . . keeping termites out of the 

[P]roperty" but argued "the agreement did not call for that." Carroll referenced 

Sottile's deposition testimony during the hearing and stated Sottile "sa[id] he 

beaded" the termiticide and that Carroll's experts—Hernandez, Nolan, and James 

Wright—indicated in their depositions that such treatment was "not within the 

standards." Carroll argued regulation 27-1085 required termiticide to be applied 

"according to the label in the context in which it[ wa]s being done" and here it was 

applied when there were no active termites. Carroll asserted IOP also failed to 

comply with regulation 27-1083 because it applied the termiticide without 

informing him or completing a Termiticide Disclosure Form. He maintained the 

economic loss rule did not apply because the losses were more than merely 

economic. Carroll argued he was entitled to $250,000 in damages for every year 

the Termite Contract was renewed. He additionally argued, in general terms, that 

insurance carriers did not provide coverage for breach of contract and this 

essentially "le[ft] homeowners with no money ever" if they were forced to only 

pursue contract remedies and were not permitted to sue for negligence. 

At the conclusion of the hearing, the circuit court ruled in favor of Respondents. 

The court ruled that based upon the record, Carroll failed to demonstrate any 

negligent act that arose outside of the contract. The circuit court indicated its 

record included the file, the exhibits, and the exhibits submitted with the 

memorandum in opposition to partial summary judgment. Thereafter, the circuit 

court issued a written order granting Respondents' motion for partial summary 

judgment. Citing to Dixon v. Texas Co.6 and Duc, the circuit court ruled Carroll's 

remedy was for breach of contract because Respondents owed no duty distinct 

from the contract. The circuit court noted it reviewed the record, including 

5 729 F. Supp. 1533, 1535 (D.S.C. 1990). 

6 222 S.C. 385, 389, 72 S.E.2d 897, 899 (1952) ("Ordinarily, where there is no duty 

except such as the contract creates, the plaintiff's remedy is for breach of contract, 

but when the breach of duty alleged arises out of a liability independently of the 

personal obligation undertaken by contract, it is a tort."). 
 

 

 

 

 

 

 

 

 

 

Carroll's second amended complaint and the "motions and memorandum of law 

filed in support therewith." It then concluded Carroll's claims arose from the 

Termite Contract and his negligence claim must be dismissed as a matter of law 

because it was "barred by the economic loss rule." 

Carroll filed a motion to reconsider. First, he argued the circuit court should 

acknowledge its review and consideration of his memorandum in opposing partial 

summary judgment, including exhibits. Second, he argued his claims for 

negligence arose out of duties created by the SCDPR regulations, which were 

separate and distinct from any duties owed under the contract. Specifically, he 

argued a duty arose under regulation 27-1085(A), (B)(2), and (D). Next, Carroll 

again argued the economic loss rule did not bar his negligence claims and his 

contractual remedies amounted to $250,000 per year for every year the contract 

was renewed. He additionally asserted Respondents' counsel admitted their 

insurance policy did not contain liability insurance for breach of contract. Carroll 

therefore contended that eliminating his tort claims would nullify the regulations 

requiring pest control applicators to carry insurance for the protection of 

homeowners and thus violated public policy. He attached several exhibits with his 

motion to reconsider, including a complete transcript of Nolan's November 2016 

deposition testimony; a complete transcript of Wright's deposition testimony, 

including 140 pages of exhibits; a complete transcript of Sottile's deposition 

testimony; a complete transcript of Hernandez's deposition testimony; and a copy 

of his memorandum in opposition to the motion for partial summary judgment, 

including exhibits. 

The circuit court denied Carroll's motion to reconsider. The circuit court rejected 

his request to consider his memorandum in opposing partial summary judgment 

and attached exhibits because it was neither filed prior to the hearing nor provided 

to the court at the hearing. It reasoned that pursuant to Rule 56(c), SCRCP, it had 

discretion to make the documents part of the file only if it did not prejudice 

Respondents. The circuit court concluded Respondents would "clearly be 

prejudiced" if it amended its order to include the unfiled memorandum and 

exhibits. In addition, the circuit court found Carroll attempted to raise the 

following as new legal arguments in his motion to reconsider: (1) Respondents 

owed duties created by the SCDPR and industry standards; (2) Respondents owed 

duties created by SCDPR regulation 27-1085(A) and (B)(2), neither of which he 

referenced in his memorandum in opposition; (3) the termite industry is a regulated 

industry and therefore falls within the narrow exception to the economic loss rule 
 

set forth in Kennedy7; and (4) Respondents owed him duties arising from 

regulatory and industry standards for application of termiticide separate and apart 

from the contractual duties under the Termite Contract. The circuit court declined 

to consider these arguments because Carroll failed to raise them during the hearing 

on the motion for partial summary judgment. The circuit court further declined to 

consider the additional exhibits because the exhibits Carroll attached to his 

memorandum in opposition included only excerpts from Hernandez's, Nolan's, and 

Sottile's depositions and did not reference Wright's deposition at all. The circuit 

court concluded that even if it were to take such arguments and evidence into 

consideration, it would still find Carroll's arguments were without merit. The 

circuit court stated the Termite Contract governed the relationship between Carroll 

and Respondents, Respondents agreed to inspect and treat the Property for termites 

and repair any damages resulting from termites up to $250,000, and South Carolina 

law did not recognize a tort duty under these circumstances. The circuit court 

concluded the economic loss rule barred Carroll's tort claims and that the exception 

in Kennedy did not apply because it was limited to residential housing 

construction. This appeal followed. 

ISSUES ON APPEAL 

1. Did the circuit court err in finding Duc v. Orkin Exterminating Co. and the 

economic loss rule applied to Carroll's negligence cause of action? 

2. Did the circuit court err in granting Respondents' motion for partial summary 

judgment as to Carroll's negligence claim when SCDPR regulations and industry 

standards created a duty separate and distinct from duties owed under the contract? 

3. Did the circuit court err in limiting the contractual remedy to $250,000 total, 

rather than $250,000 per year for each year the contract was renewed? 

4. Did the circuit court err in limiting Carroll's claims to breach of contract when 

Respondents' insurance coverage excluded breach of contract from coverage? 

7 Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 345-47, 384 S.E.2d 730, 

736-37 (1989) (holding the economic loss rule does not prevent the imposition of 

tort liability upon a residential homebuilder when the builder violates a legal duty 

and that the "violation of a building code" or failure to "undertake construction 

commensurate with industry standards" violates a builder's legal duty). 
 

 

 

 

 

 

 

 

5. Should this court reject the findings and conclusions of the circuit court's order 

denying reconsideration because they were false and pretextual? 

STANDARD OF REVIEW 

"When reviewing a grant of summary judgment, an appellate court applies the 

same standard used by the trial court." Town of Summerville v. City of North 

Charleston, 378 S.C. 107, 109, 662 S.E.2d 40, 41 (2008). "[S]ummary judgment is 

proper when there is no genuine issue as to any material fact and the moving party 

is entitled to judgment as a matter of law." Id. at 110, 662 S.E.2d at 41; see also 

Rule 56(c), SCRCP ("[Summary judgment] shall be rendered forthwith if the 

pleadings, depositions, answers to interrogatories, and admissions on file, together 

with the affidavits, if any, show that there is no genuine issue as to any material 

fact and that the moving party is entitled to a judgment as a matter of law."). "In 

determining whether any triable issues of fact exist for summary judgment 

purposes, the evidence and all the inferences which can be reasonably drawn from 

the evidence must be viewed in the light most favorable to the nonmoving party." 

Law v. S.C. Dep't of Corr., 368 S.C. 424, 434, 629 S.E.2d 642, 648 (2006). 

LAW AND ANALYSIS 

A. Negligence Claims 

Carroll argues the economic loss rule does not apply to his claims because the rule 

precludes tort liability when a defective product causes injury to the product itself 

and whether it applies to services is not settled law. He argues his claims arise 

from Respondents' failure "to properly perform pest control services at the 

Property" in conformance with industry standards and regulations. Citing to 

Kennedy, Carroll further argues that when private parties contract in a "regulated 

industry," and a party violates the applicable regulations in performing the 

contract, the aggrieved party has a cause of action in tort. He contends that 

pursuant to Kennedy, regulations and industry standards create legal duties and 

Respondents were liable in tort because they violated these duties. Carroll 

contends the circuit court erred in relying on Duc because it did not involve alleged 

regulatory violations or allegations of other breaches of duties originating outside 

of the contract. He additionally asserts the economic loss rule did not apply to his 

claims because he sought damages for harm to the Property. 
 

 

 

 

 

 

 

 

 

 

 

 

Carroll next argues that under regulation 27-1085(B)(2),8 the breach of a contract 

is "a dual regulatory violation." He contends "evidence of a regulatory violation is 

evidence of negligence" and the duties arise out of both contract and regulation, 

allowing him to maintain causes of action for negligence and breach of contract 

pursuant to Kennedy. In addition, Carroll asserts that when Respondents applied 

termiticide, they undertook duties pursuant to regulatory requirements and industry 

standards for application of termiticide that were "separate and apart from the 

contractual and regulatory duties inherent to the [Termite Contract]." He argues 

the expert testimony of Wright, Nolan, and Hernandez created questions of fact as 

to whether Respondents violated "pesticide application and operator regulations as 

part of the contractual and extra-contractual activities in relation to the Property." 

Carroll asserts regulation 27-1083 requires records of treatment or bait station 

monitoring be kept for as long as the contract is in place and that Nolan testified 

IOP violated the regulations by failing to document such treatment. Carroll argues 

Wright testified Respondents violated the standard of care for termiticide use, bait 

station use, and bait station monitoring. We disagree. 

"The economic loss rule is a creation of the modern law of products liability." 

Sapp, 386 S.C. at 147, 687 S.E.2d at 49. It provides "there is no tort liability for a 

product defect if the damage suffered by the plaintiff is only to the product itself." 

Id. "In other words, tort liability only lies where there is damage done to other 

property or personal injury." Id. The purpose of this rule "is to define the line 

between recovery in tort and recovery in contract." Id. "Contract law seeks to 

protect the expectancy interests of the parties," whereas tort law "seeks to protect 

safety interests and is rooted in the concept of protecting society as a whole from 

physical harm to person or property." Id. "In most instances, a negligence action 

will not lie when the parties are in privity of contract. When, however, there is a 

special relationship between the alleged tortfeasor and the injured party not arising 

in contract, the breach of that duty of care will support a tort action." Tommy L. 

Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc., 320 S.C. 49, 

55, 463 S.E.2d 85, 88 (1995). 

In Kennedy, our supreme court established a narrow exception to the economic loss 

rule in the context of residential home building and held the rule did not bar 

recovery in tort when a builder violates an applicable building code or deviates 

from industry standards. 299 S.C. at 347, 384 S.E.2d at 738; see also Sapp, 386 

8 See S.C. Code Ann. Regs. 27-1085(B)(2) (Supp. 2022) ("Treatment and 

inspection must be performed in accordance with these regulations and with the 

terms of the written agreement or contract for as long as the contract is valid."). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S.C. at 148, 687 S.E.2d at 49 (explaining the court in Kennedy created a "narrow 

exception to the economic loss rule to apply solely in the residential home 

[building] context"). The court explained, "If a builder performs construction in 

such a way that he violates a contractual duty only, then his liability is only 

contractual," but "[i]f he acts in a way as to violate a legal duty . . . his liability is 

both in contract and in tort." Kennedy, 299 S.C. at 346, 384 S.E.2d at 737. 

In Tommy L. Griffin Plumbing & Heating Co., our supreme court held design 

professionals were not insulated from liability "when the relationship between the 

design professional and the plaintiff [wa]s such that the design professional owe[d] 

a professional duty to the plaintiff arising separate and distinct from any 

contractual duties between the parties." 320 S.C. at 55, 463 S.E.2d at 89 

(emphasis added). The court explained, 

In our view, the Kennedy application of the 'economic 

loss' rule maintains the dividing line between tort and 

contract while recognizing the realities of modern tort 

law. . . . [T]he question of whether [a] plaintiff may 

maintain an action in tort for purely economic loss turns 

on the determination of the source of the duty [the] 

plaintiff claims the defendant owed. A breach of a duty 

which arises under the provisions of a contract between 

the parties must be redressed under contract, and a tort 

action will not lie. A breach of a duty arising 

independently of any contract duties between the parties, 

however, may support a tort action. 

Id. at 54-55, 463 S.E.2d at 88 (footnote omitted). 

In Koontz v. Thomas, this court applied the economic loss rule to plaintiff's 

professional negligence claim against an architectural firm and upheld the circuit 

court's conclusion that the rule barred such claims because "the alleged breaches of 

duty in th[at] case [we]re contractual in nature." 333 S.C. 702, 712, 511 S.E.2d 

407, 412 (Ct. App. 1999). We noted, "Our inquiry . . . is whether the duties 

[plaintiff] allege[d] . . . ar[o]se from the parties' contract or independently 

therefrom." Id. 

Neither Dixon nor Duc specifically reference the economic loss rule, but in both 

cases, the court found the plaintiff was not entitled to bring tort claims when his 

allegations arose out of the performance or nonperformance of a contract. In 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dixon, our supreme court concluded the plaintiff could bring an action only for 

breach of contract because "[t]he breach of duty complained of ar[ose] solely from 

contract and constitute[d] nonfeasance rather than misfeasance." 222 S.C. at 390, 

72 S.E.2d at 899. The court stated, "Ordinarily, whe[n] there is no duty except 

such as the contract creates, the plaintiff's remedy is for breach of contract, but 

when the breach of duty alleged arises out of a liability independently of the 

personal obligation undertaken by contract, it is a tort." Id. at 389, 72 S.E.2d at 

899. In Duc, the United States District Court granted summary judgment as to the 

plaintiff's allegations of negligence, holding the plaintiff could not recover on his 

negligence cause of action because the defendant owed him "no legal duties 

independent of the contract." 729 F. Supp. at 1535. The court stated, "South 

Carolina courts have recognized the distinction between contract and tort causes of 

action and have held that in order for a plaintiff to state a claim in tort, he must 

allege a duty owed him by the defendant separate and distinct from any duty owed 

under a contract." Id. In granting summary judgment, the court reasoned that the 

contract created and defined the duties and liabilities of the parties and that the 

plaintiff "alleged no breach of duty by [the defendant] that [wa]s independent of 

the contract." Id. 

We hold the circuit court did not err in granting partial summary judgment in favor 

of Respondents on the ground that Carroll failed to identify a duty Respondents 

owed to him outside of the contract. Here, the Termite Contract defined the duties 

and liabilities of the parties. Respondents' duty under the contract was to treat, 

reinspect, and control for termite activity. Carroll alleged that as a result of 

Respondents' failure to properly inspect and treat for termites, termite activity 

occurred and caused damage to the Property, which he seeks to repair. He 

acknowledged during the summary judgment hearing that Respondents' actions "all 

related to . . . keeping termites out of the [P]roperty." The contract therefore 

provided for the precise damage that occurred. Even assuming Respondents' 

failure to adequately perform pest control services violated regulations and 

industry standards, all of these acts relate to the duties Respondents' owed Carroll 

under the contract. Thus, such claims do not give rise to legal duties owed outside 

of the contract. Because Respondents' duties arise solely from contract, we hold 

the circuit court did not err in concluding Carroll was barred from pursing 

negligence claims against Respondents. Further, Carroll's allegations pertain to a 

contract to perform termite services and do not involve residential home building. 

Thus, we hold the exception to the economic loss rule set forth in Kennedy does 

not apply. See Sapp, 386 S.C. at 148, 687 S.E.2d at 49 (explaining the court in 

Kennedy created a "narrow exception to the economic loss rule to apply solely in 

the residential home [building] context" (emphasis added)); see also Kennedy, 299 
 

 

 

 

S.C. at 347, 384 S.E.2d at 737 ("The 'economic loss' rule will still apply where 

duties are created solely by contract. In that situation, no cause of action in 

negligence will lie." (footnote omitted)). Based upon the foregoing, we affirm the 

circuit court's grant of partial summary judgment as to Carroll's negligence claims 

because he failed to identify a legal duty separate and distinct from Respondents' 

contractual duty under the Termite Contract.

9 

B. Limitation of Remedy to $250,000 

Carroll argues each annual renewal of the contract entitled him to $250,000 for 

each year that Respondents were in breach of the contact. 

Carroll has cited no legal authority to support this argument. We therefore find 

this issue is abandoned. See Mulherin-Howell v. Cobb, 362 S.C. 588, 600, 608 

S.E.2d 587, 594 (Ct. App. 2005) (noting the appellant abandoned issues on appeal 

and this court need not consider them when the appellant failed to cite any 

supporting authority for its position and its arguments were merely conclusory 

statements). 

C. Exclusion from Coverage 

Finally, Carroll argues SCDPR regulations require pest control companies to carry 

liability insurance and limiting his remedy to breach of contract would nullify this 

regulation. He contends that during an off-the-record discussion in chambers, 

Respondents' counsel informed the circuit court that Respondents' policies 

contained an exclusion for contractual liability. Carroll asks this court to take 

judicial notice that policy forms for commercial general liability insurance 

coverage "are generally alike, as evidenced by the exclusionary language in both 

[Respondents'] policies." He argues this provides another basis for allowing a 

cause of action in tort in this context. 

9 Carroll asserts the issue of whether the economic loss rule applies to contracts for 

services remains unsettled law. We find this argument is not preserved for our 

review. See Herron v. Century BMW, 395 S.C. 461, 465, 719 S.E.2d 640, 642 

(2011) ("At a minimum, issue preservation requires that an issue be raised to and 

ruled upon by the trial judge."); cf. Eaton Corp. v. Trane Carolina Plains, 350 

F. Supp. 2d 699, 703 (D.S.C. 2004) (noting "the contours of the doctrine remain far 

from clear"). 
 

 

 

We find these arguments are not preserved for appellate review. See Elam v. S.C. 

Dep't of Transp., 361 S.C. 9, 23, 602 S.E.2d 772, 779-80 (2004) ("Issues and 

arguments are preserved for appellate review only when they are raised to and 

ruled on by the lower court."); see also Johnson v. Sonoco Prods. Co., 381 S.C. 

172, 177, 672 S.E.2d 567, 570 (2009) ("An issue may not be raised for the first 

time in a motion to reconsider."). During the hearing on the motion for partial 

summary judgment, Carroll argued, in general terms, that insurance carriers do not 

provide coverage for breach of contract, leaving homeowners no remedy if they are 

unable to pursue negligence claims. However, Carroll provided no evidentiary 

support or legal authority for this argument prior to, or during, the summary 

judgment hearing. See Loyd's Inc. by Richardson Constr. Co. of Columbia, S.C. v. 

Good, 306 S.C. 450, 453, 412 S.E.2d 441, 443 (Ct. App. 1991) ("[Rule] 56(c) 

requires summary judgment motions and, inferentially, supporting materials to be 

on file when they are to be relied upon at a summary judgment motion hearing."). 

Further, Carroll acknowledged the discussion regarding liability coverage occurred 

off the record. See York v. Conway Ford, Inc., 325 S.C. 170, 173, 480 S.E.2d 726, 

728 (1997) ("An objection made during an off-the-record conference which is not 

made part of the record does not preserve the question for review. "). We hold this 

was insufficient to raise the issue to the circuit court at the summary judgment 

phase. Rather, Carroll argued Respondents' insurance policies contravened 

SCDPR regulations for the first time in his motion to reconsider. Accordingly, we 

hold Carroll failed to preserve these arguments for appellate review. See Peterson 

v. Porter, 389 S.C. 148, 152, 697 S.E.2d 656, 658 (Ct. App. 2010) (finding an 

issue was not preserved for appellate review when the appellant raised the 

argument in a motion to reconsider but failed to raise it during the summary 

judgment proceedings). 

D. Motion to Reconsider 

Carroll asserts this court should "reject the findings and conclusions" in the circuit 

court's order denying his motion to reconsider because they were "false and 

pretextual." Carroll contends that although the circuit court failed to mention the 

memorandum or exhibits in its order granting the motion for partial summary 

judgment, this court must consider these submissions part of the record because the 

circuit court incorporated them into the record during the hearing. 

To the extent Carroll argues the circuit court erred in refusing to consider his 

memorandum opposing the motion for partial summary judgment and attached 

exhibits and in declining to consider evidence Carroll presented for the first time 

with his motion to reconsider, we find these arguments are without merit because 
 

 

 

 

 

 

 

 

 

 

the circuit court acted within its discretion. See Rule 56(c), SCRCP (providing a 

motion for summary judgment "shall be served at least [ten] days before the time 

fixed for the hearing," and "[t]he adverse party may serve opposing affidavits not 

later than two days before the hearing"); Loyd's Inc., 306 S.C. at 453, 412 S.E.2d at 

443 ("[Rule] 56(c) requires summary judgment motions and, inferentially, 

supporting materials to be on file when they are to be relied upon at a summary 

judgment motion hearing. To be on file, we hold they ordinarily must have been 

filed." (emphasis added); id. ("However, . . . whe[n] the court file is in the physical 

custody of the trial judge we hold she ha[s] the discretion and the inherent power to 

receive the documents and make them a part of the file provided their receipt did 

not prejudice [the defendant]."); see also First Union Nat'l Bank of S.C. v. Hitman, 

Inc., 308 S.C. 421, 422, 418 S.E.2d 545, 545 (1992) ("[A] judge is not bound by 

[a] prior oral ruling and may issue a written order which is in conflict with the oral 

ruling."); Johnson, 381 S.C. at 177, 672 S.E.2d at 570 ("An issue may not be raised 

for the first time in a motion to reconsider."). 

Regardless, we have considered Carroll's memorandum and exhibits. Even 

considering these submissions, we hold the circuit court did not err in granting the 

motion for partial summary judgment. See Town of Summerville, 378 S.C. at 110, 

662 S.E.2d at 41 ("[S]ummary judgment is proper when there is no genuine issue 

as to any material fact and the moving party is entitled to judgment as a matter of 

law."). Viewing this evidence in the light most favorable to Carroll, we find none 

of this evidence established the existence of a duty owed by Respondents to Carroll 

that was separate and apart from the contract. Rather, the testimony Carroll relies 

upon pertained to Respondents' failure to perform according to the terms of the 

Termite Contract. As to the expert testimony regarding the application of 

termiticide and the violation of regulations and industry standards, this testimony 

also relates to Respondents' conduct with respect to its duties under the Termite 

Contract. Thus, we hold the circuit court did not err in finding the evidence did not 

establish the existence of a duty owed to Carroll that was separate and distinct 

from the contract. 

CONCLUSION 

Based on the foregoing, the circuit court's order granting partial summary 

judgment in favor of Respondents is 

AFFIRMED. 

WILLIAMS, C.J., and KONDUROS, J., concur.