Court Opinion

ID: 8295679
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:02:32.713217+00
Date Added: 2024-06-11T16:44:03.123016
License: Public Domain

LOCKEMY, J.,
concurring in part and dissenting in part.
I respectfully concur in part and dissent in part. I agree with the majority that the trial court erred in granting summary judgment on Marick’s cross-claim for equitable indemnity. I disagree, however, with the majority that summary judgment was proper on Marick’s negligence cross-claim. I believe Addy v. Bolton3 and its progeny support Marick’s theory of recovery of attorney’s fees and costs as “special damages” under a negligence action. Therefore, I would reverse the trial court’s grant of summary judgment on the negligence cross-claim and remand for further proceedings.
In Addy, Thomason contracted to make repairs for a retail building owned by the Boltons and leased to the Addys. 257 *627S.C. at 31, 183 S.E.2d at 708. During the repairs, Thomason set fire to the building damaging the Addys’ goods. Id. The Addys sued the Boltons and Thomason, alleging the Boltons were negligent in engaging unskillful agents to make the repairs. Id. Thus, the Boltons were sued for their own negligence, not vicariously for the negligence of another party. The Boltons cross-claimed against Thomason for indemnity from any judgment that might be recovered plus attorney’s fees incurred in defending the action. Id. at 31, 183 S.E.2d at 709. At trial, the jury returned a verdict against Thomason only, and the Boltons were exonerated from all liability. Id. at 32, 183 S.E.2d at 709. The trial court, however, refused to award indemnity and granted a directed verdict against the Boltons on their cross-claim. Id. The Boltons appealed and our supreme court reversed, basing its decisions on two alternative holdings. See id. at 33, 183 S.E.2d at 709 (“The weight of authority sustains [the Boltons’] right of recovery, either on the theory of an implied contract to indemnify, or because they were put to the necessity of defending themselves against [the Addys’] claim by the tortious conduct of [Thomason], or by his breach of contract.” (emphasis added)). First, it found the Boltons could recover attorney’s fees incurred in the action because they were forced to defend themselves against the Addys’ claim by the tortious conduct of Thomason. Id. Specifically, the court held,
[W]here the wrongful act of the defendant has involved the plaintiff in litigation with others or placed him in such relation with others as makes it necessary to incur expense to protect his interest, such costs and expenses, including attomeyt’s] fees, should be treated as the legal consequences of the original wrongful act and may be recovered as damages. In order to recover attorney[’s] fees under this principle, the plaintiff must show: (1) that the plaintiff had become involved in a legal dispute either because of a breach of contract by the defendant or because of [the] defendant’s tortious conduct; (2) that the dispute was with a third party — not with the defendant; and (3) that the plaintiff incurred attorney[’s] fees connected with that dispute. If the attorneyfs] fees were incurred as a result of a breach of contract between plaintiff and defendant, the defendant will be deemed to have contemplated that his *628breach might cause plaintiff to seek legal services in his dispute with the third party.
Id. at 33, 183 S.E.2d at 709-10 (internal quotation marks omitted); see also Restatement (Second) of Torts § 914 (1979) (“One who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures thereby suffered or incurred in the earlier action.”).
Alternatively, the Addy court found that, on the facts of the case, the Boltons could also recover expenses incurred in the litigation under the theory of equitable indemnity. 257 S.C. at 33-34, 183 S.E.2d at 710; see also Town of Winnsboro v. Wiedeman-Singleton, Inc., 303 S.C. 52, 59, 398 S.E.2d 500, 504 (Ct.App.1990), aff'd by 307 S.C. 128, 414 S.E.2d 118 (1992). Because the jury exonerated the Boltons of any fault for the Addys’ injuries, equity required Thomason, the at-fault party, to indemnify them as a matter of law. Addy, 257 S.C. at 34, 183 S.E.2d at 710.
In the present case, the trial court granted summary judgment on Marick’s negligence cross-claim against Clear View, finding it was merely a disguised claim for equitable indemnification. I believe the trial court erred because Addy specifically allows the recovery of attorney’s fees and costs “at law in the form of special damages, or in equity in the form of equitable indemnity.” Griffin v. Van Norman, 302 S.C. 520, 523, 397 S.E.2d 378, 380 (Ct.App.1990) (stating that in Addy, the supreme court “held that recovery may be had at law in the form of special damages, or in equity in the form of equitable indemnity” (emphasis added)). Here, as in Addy, “the wrongful act of [Clear View] has involved [Marick] in litigation with [Stoneledge]” such that it has made it necessary for Marick “to incur expense to protect [its] interest.” Specifically, Stoneledge sued Marick and Clear View based on allegations that Clear View’s stone work was deficient, which Clear View has admitted. As a result of the underlying action, Marick has incurred expenses, including attorney’s fees, in an attempt to protect itself from liability to Stone-ledge. Thus, Addy supports Marick’s attempt to recover attorney’s fees and costs as “special damages” arising from Clear View’s tortious conduct.
*629Admittedly, the cases Marick cites in its brief do not involve the recovery of “special damages” under an independent cause of action for negligence. For example, in Town ofWinnsboro, Turner-Murphy, the party awarded attorney’s fees, argued on appeal “that it [wa]s entitled to recover its attorney’s fees as an element of special damage arising directly from Specialty’s breach of contract or, alternatively, under the principle of equitable indemnity.” 303 S.C. at 55, 398 S.E.2d at 502 (emphasis added). This court agreed, finding Addy “clearly supports the position of Turner-Murphy” and “holding] that the judgment of the circuit court may be affirmed both on the theory of special damages and on the theory of equitable indemnity.” ((emphasis added)). Id. at 59, 398 S.E.2d at 504. Thus, although Town of Winnsboro involved the recovery of attorney’s fees and costs as “special damages” arising from a breach of contract, it stands for the proposition that a party can recover these damages at law independent of a claim for equitable indemnity.
I see no reason to allow recovery of attorney’s fees and costs as “special damages” in a breach of contract action, yet deny it under a negligence cause of action. The plain language of Addy makes clear that attorney’s fees and costs incurred by Marick in defending itself against Stoneledge’s claim “should be treated as the legal consequences of the original wrongful act and may be recovered as damages.” Notably, nothing in Addy or any other controlling authority4 precludes Marick from recovering these damages under a negligence theory. Addy did not limit the recovery of these damages to breach of contract actions alone. 257 S.C. at 33, *630183 S.E.2d at 709 (stating that to recover attorney’s fees and costs under the theory of special damages, “the plaintiff must show ... that [he became] involved in a legal dispute either because of a breach of contract by the defendant or because of [the] defendant’s tortious conduct” (emphasis added)); see also id. at 33, 183 S.E.2d at 710 {“If the attorney[’s] fees were incurred as a result of a breach of contract between plaintiff and defendant, the defendant will be deemed to have contemplated that his breach might cause plaintiff to seek legal services in his dispute with the third party.” (emphasis added)). Although the concept of “special damages” generally arises in breach of contract actions, these damages can also arise in tort. See 11 S.C. Jur. Damages § 4 (1992) {“In a tort action, special damages must be the direct consequence of the illegal act done, and flowing from it....” (emphasis added) (internal quotation marks omitted)).
Based on the foregoing, I would reverse the circuit court’s grant of summary judgment on Marick’s negligence cross-claim.

. 257 S.C. 28, 183 S.E.2d 708 (1971).

. In finding Marick's negligence cross-claim was merely a disguised claim for equitable indemnification, the circuit court and the majority rely on two federal district court cases — South Carolina National Bank v. Stone, 749 F.Supp. 1419 (D.S.C.1990) and United States Fidelity & Guaranty Co. v. Patriot’s Point Development Authority, 788 F.Supp. 880 (D.S.C.1992). I find these cases unpersuasive for several reasons. First, federal district court decisions are not binding on this court. See Walden v. Harrelson Nissan, Inc., 399 S.C. 205, 209, 731 S.E.2d 324, 326 (Ct.App.2012). Next, I question the applicability of these cases because they involved federal securities law, which, unlike the present general contractor and subcontractor context, have policies that disfavor indemnification. See Stone, 749 F.Supp. at 1429; Patriot’s Point Dev. Auth., 788 F.Supp. at 882 n. 2. Most importantly, these decisions conflict with the holding in Addy — a decision of our supreme court that *630we must follow. See Town of Winnsboro, 303 S.C. at 60-61, 398 S.E.2d at 505 ("Of course, the rule in Addy, as a decision of the [sjupreme [c]ourt, must prevail.”).