Court Opinion

ID: 150097
Source: CourtListenerOpinion
Date Created: 2010-07-06 17:48:29+00
Date Added: 2024-06-11T17:24:12.814122
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                               No. 09-1642

SUNLAND CONSTRUCTION COMPANY, INCORPORATED,

                 Plaintiff – Appellee,

           and

THE CITY OF MYRTLE BEACH,

                 Defendant – Appellee,

           v.

WILBUR SMITH, INCORPORATED,

                 Defendant – Appellant,

           and

COASTAL   SCIENCE   AND   ENGINEERING,   INCORPORATED;   THOMAS   E.
WHITE,

                 Defendants,

HARTFORD INSURANCE COMPANY,

                 Third Party Defendant.

Appeal from the United States District Court for the District of
South Carolina, at Florence. R. Bryan Harwell, District Judge.
(4:05-cv-01227-RBH)

Submitted:   June 2, 2010                      Decided:    July 6, 2010

Before KING, DAVIS, and KEENAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.

Franklin J. Smith, Jr., David A. Anderson, Mason A. Summers,
RICHARDSON, PLOWDEN & ROBINSON, P.A., Columbia, South Carolina,
for Appellant.     Michael W. Battle, BATTLE & VAUGHT, P.A.,
Conway, South Carolina; Lawrence C. Melton, NEXSEN PRUET, LLC,
Columbia, South Carolina, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

             Sunland Construction Company, Inc. (“Sunland”) filed

suit   against     the    City   of   Myrtle     Beach,     South    Carolina     (the

“City”) alleging breach of contract after the City terminated

its contract with Sunland for the installation, by horizontal

direct    drilling       (“HDD”),     of   three       42-inch    pipes     to   carry

rainwater under Myrtle Beach and approximately 1000 feet out to

sea.     The termination of the contract was based on Sunland’s

failure or     refusal     to    complete      the     project.     Sunland      sought

approximately $3 million in costs it allegedly incurred while

attempting    to    perform      under     the   contract     based    on    what   it

alleged were defective specifications.                    Sunland also sued the

City’s   design    engineer,      Wilbur       Smith    Associates    (“WSA”),      for

breach of its implied warranty of the suitability of the design

specifications.

           The City counterclaimed against Sunland for breach of

contract, seeking to recover approximately $400,000 from Sunland

and/or its surety in excess re-procurement costs it incurred by

having the project completed by another contractor, using the

alternative, and less risky, “open trench” method.                          The City

also sued WSA for negligence and breach of contract.

           Following an eight-day bench trial, the district court

concluded that Sunland could not recover against the City for

breach of contract because there was no meeting of the minds as

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to the allocation of risk for adverse subsurface conditions, and

that the City could not recover against Sunland for the same

reason.   The court also found WSA was not liable to Sunland for

negligence; however, it found that WSA was liable to the City.

The ultimate finding of liability was based on the following

subsidiary findings: (1) WSA negligently recommended that the

contract be awarded to Sunland, inasmuch as; (2) Sunland’s bid

was dramatically lower than the other HDD bids; (3) WSA had not

adequately investigated Sunland’s bid prior to recommending it;

and (4) WSA, which was not independently qualified to render a

recommendation, had fired its HDD consultant prior to making its

recommendation to the City, a fact that WSA had withheld from

the City at the time it made its recommendation. The district

court awarded damages in the amount of $459,769.00 plus costs

and attorney’s fees in favor of the City against WSA, rejected

all other claims, and denied WSA’s motion for reconsideration.

          Neither Sunland nor the City has appealed the district

court’s orders; however, WSA noted an appeal alleging that the

district court erred by:

     (1) finding that WSA’s negligence was the proximate
     cause of the City’s damages; and

     (2) concluding that there was no meeting of the minds
     between Sunland and the City regarding allocation of
     the risks for adverse subsurface conditions.

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            Following a trial, this court views the record in a

light most favorable to the party prevailing below.                                 See Sec.

Exch. Comm’n v. Pirate Investor LLC, 580 F.3d 233, 237 n.2 (4th

Cir. 2009); ePlus Tech., Inc. v. Aboud, 313 F.3d 166, 171 n.1

(4th     Cir.    2002).          The     court      reviews      a    district        court’s

conclusions of law de novo and its factual findings for clear

error.     Roanoke Cement Co. v. Falk Corp., 413 F.3d 431, 433 (4th

Cir. 2005).        “A finding is ‘clearly erroneous’ when although

there is evidence to support it, the reviewing court on the

entire evidence is left with the definite and firm conviction

that   a   mistake      has   been      committed.”        United          States    v.   U.S.

Gypsum Co., 333 U.S. 364, 395 (1948); but see Fed. R. Civ. P.

52(a)(6)    (due     regard       must    be       given   “to       the    trial     court’s

opportunity to judge the witnesses’ credibility”).

                                 I.    Proximate Cause

            It     is     well        settled      that    issues          of     negligence,

including proximate cause, “are generally treated as findings of

fact reviewable under Fed. R. Civ. P. 52(a).”                                   See Bonds v.

Mortensen and Lange, 717 F.2d 123, 125 (4th Cir. 1983) (citing

Scheel v. Conboy, 551 F.2d 41, 43 (4th Cir. 1977); Lane v.

United States, 529 F.2d 175, 180 (4th Cir. 1975).

            Under South Carolina law, “[p]roximate cause requires

proof of both causation in fact and legal cause.”                               See Mellen v.

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Lane,    377     S.C.    261,   278,    659       S.E.       2d    236    (Ct.    App.     2008)

(citations        omitted).       “Causation            in        fact       is   proven      by

establishing the plaintiff’s injury would not have occurred ‘but

for’ the defendant’s action,” whereas legal causation “is proved

by establishing foreseeability” of harm to the plaintiff.                                    Id.

(citations omitted).            WSA argues that its negligence was neither

the     “cause    in    fact”    nor    the       “legal”         cause      of   the    City’s

injuries.      We address each contention in turn.

               WSA argues that its negligence was not the “but for”

cause of the City’s injuries because, even in the absence of its

negligent        recommendation        that       the    contract            be   awarded    to

Sunland, the City “may still have contracted with Sunland.”                                   In

support of this contention, WSA points to the testimony of a

superintendent with the City’s Public Works Department, which,

WSA   maintains,        acknowledged     that      “even          if   the    City   had    been

aware during the bid process that the HDD method carried more

risks that [sic] the trench method, the City may possibly have

still awarded the project to Sunland.”                       WSA also argues that the

City may have opened itself up to public criticism and lawsuits,

if the City had not selected Sunland, which had been the lowest

bidder for the project.

               However, based on the entire record, when viewed in

the light most favorable to the City, we find that the district

court did not clearly err in finding that WSA was the cause in

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fact   of    the   City’s      injuries       (i.e.,     that    but     for    WSA’s

recommendation, the City would not have chosen Sunland).                        There

is substantial evidence to support the City’s contentions that

the City was not required to award the contract to the lowest

bidder and that it was persuaded to hire Sunland based on WSA’s

representations.         Further, WSA has offered nothing more than

mere speculation concerning what the City “may possibly” have

done in its attempt to show that the district court clearly

erred on this point.        When taken as a whole, the record does not

lead to the “definite and firm” conclusion “that a mistake has

been committed.”

             Turning to WSA’s contention that it was not the legal

cause of the City’s injuries, we note that the South Carolina

Supreme Court has stated that while a plaintiff must establish

that   the   defendant    reasonably         could   have   foreseen     that       some

injury arising out his act or omission might occur, it is not

necessary    for   him    to   prove    that     the    defendant      should       have

contemplated the particular event that ultimately occurred.                         See

J.T. Baggerly v. CSX Transp., Inc., 370 S.C. 362, 369-71, 635

S.E.2d 97 (2006).        A plaintiff does not have to prove that the

defendant’s    negligence      was     the    sole     proximate    cause      of   his

injuries; he “merely has to show that it was foreseeable that

[the   defendant’s]      act   (or     omission)       could    cause,    or    be    a

contributing cause to, appellant’s injury.”                     Id., 370 S.C. at

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371, 635 S.E.2d 97 (citing Whitlaw v. Kroger Co., 306 S.C. 51,

410 S.E.2d 251 (1991)).            Thus, “it is sufficient if the evidence

establishes that the defendant’s negligence is ‘a concurring or

a contributing proximate cause.’”                  Id., 370 S.C. at 369, 635

S.E.2d 97 (citation omitted).

              WSA argues that even if its negligence in the bidding

process set the stage for the City’s injuries, Sunland’s acts

were the sole proximate cause.                 We find this argument fails for

a number of reasons.

              First, in a bidding process, where WSA was retained

specifically for its engineering expertise, it was reasonably

foreseeable that the City would enter into a contract with a

company based on WSA’s recommendation.                    Moreover, because the

company that WSA recommended bid the job at a dramatically lower

cost   than    any    comparable        bidders,    and   because     WSA   did   not

investigate its bid, it was also foreseeable that the company

recommended could not or would not perform the promised services

for the promised fee.             It follows, then, that it was a natural

and probable consequence of WSA’s negligence that the City would

be   forced    to    pay   more    to    find    cover    in   the   re-procurement

market.

              Moreover,     even     to    the     extent      Sunland’s    conduct

contributed to the City’s injuries, this fact alone does not

sever WSA’s liability for its initial negligence, which set into

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motion all of the events that ultimately, and foreseeably, lead

to the City’s harm.               Cf. Mellon, 377 S.C. at 281, 659 S.E.2d 236

(“if     the    acts       of     the     intervening         agency        are    a     probable

consequence          of      the        primary       wrongdoer’s           actions,          i.e.,

‘foreseeable,’         the      primary      wrongdoer        is     liable”).           This     is

because    there       was      no     “break[]       [in]    the     sequence         or   causal

connection          between       the    [WSA’s]       negligence           and    the      injury

alleged.”       Id. (citing Matthews v. Porter, 239 S.C. 620, 628,

124 S.E.2d 321, 325 (1962)).

               In    short,       it    is    clear     that        WSA’s    conduct        was    a

“substantial factor in the harm to [the City],” and the mere

fact   that     WSA    “neither         foresaw       nor    should    have       foreseen      the

extent of the harm or manner in which it occurred does not

negative [its] liability.”                   See J.T. Baggerly, 370 S.C. at 369,

635 S.E.2d 97.             Thus, because the harm was foreseeable, the

district court did not clearly err in determining that WSA’s

acts or omissions were the legal cause of the City’s injuries.

          II.       Contract Claims Between Sunland and the City

               As    for      WSA’s      contention          that    the     district         court

clearly erred in determining that there was no meeting of the

minds,    and       thus     no      binding      contract      between       the      City       and

Sunland, both the City and Sunland argue, inter alia, that WSA

lacks standing to contest this finding.                        We agree that WSA, as a

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stranger       to   the    ostensible       contract       between    Sunland    and    the

City, lacks standing. See                  R.J. Griffin & Co. v. Beach Club II

Homeowners Ass'n, 384 F.3d 157, 164 (4th Cir. 2004) (“Generally,

a third person not in privity of contract with the contracting

parties has no right to enforce a contract.” (applying South

Carolina law) (citation omitted)). In essence, WSA asserts it

has    standing       on   the    altogether        tenuous     ground    that    it    was

“aggrieved” by the finding of a lack of mutual assent, implying

that the district court was essentially left with no choice but

to    impose    liability        on   it    (rather    than     on   Sunland)    for    the

City’s excess costs. This contention lacks merit.

               In   any    event,     as    stated     above,    South    Carolina      law

recognizes that liability may attach when there are multiple

concurring or contributing proximate causes, and WSA has failed

to point to any case or authority that states, or even suggests

that this legal principle is inapplicable based on whether or

not a contract was formed or contractual claims are involved.

Notably, WSA declined to assert indemnity or contribution claims

against Sunland to avoid or lessen its potential liability to

the    City     for    its    failure        to     exercise    reasonable       care   in

recommending        which    bid      the    City    should     accept.     It   may    not

belatedly insert such a claim into the case by challenging the

district       court’s     factual     findings       in    respect    to   an    alleged

contract to which it was never a party.

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                              *   *        *    *     *

           We accordingly affirm the district court’s judgment.

We   dispense   with   oral   argument     because   the   facts   and   legal

contentions are adequately presented in the materials before the

court and argument would not aid the decisional process.

                                                                    AFFIRMED

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