Court Opinion

ID: 1010409
Source: CourtListenerOpinion
Date Created: 2013-07-04 20:11:17.954237+00
Date Added: 2024-06-11T12:04:01.978116
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

SEA SIDE VILLAS II HORIZONTAL           
PROPERTY REGIME; SEA SIDE VILLAS
II HOME OWNERS ASSOCIATION,
                Plaintiffs-Appellees,
                 v.                             No. 02-2104
SINGLE SOURCE ROOFING
CORPORATION; G.M. KASSEM ROOFING
SYSTEMS, INCORPORATED,
             Defendants-Appellants.
                                        
SEA SIDE VILLAS II HORIZONTAL           
PROPERTY REGIME; SEA SIDE VILLAS
II HOME OWNERS ASSOCIATION,
               Plaintiffs-Appellants,
                 v.                             No. 02-2114
SINGLE SOURCE ROOFING
CORPORATION; G.M. KASSEM ROOFING
SYSTEMS, INCORPORATED,
              Defendants-Appellees.
                                        
           Appeals from the United States District Court
          for the District of South Carolina, at Columbia.
Julian Abele Cook, Jr., Senior District Judge, sitting by designation.
                           (CA-99-3142-23)

                       Argued: April 3, 2003

                       Decided: May 2, 2003

      Before WILKINSON and SHEDD, Circuit Judges, and
              HAMILTON, Senior Circuit Judge.
2             SEA SIDE VILLAS v. SINGLE SOURCE ROOFING
Affirmed in part, vacated in part, and remanded by unpublished opin-
ion. Senior Judge Hamilton wrote the opinion, in which Judge Wil-
kinson and Judge Shedd joined.

                             COUNSEL

ARGUED: Michael Yablonski, MEYER, UNKOVIC & SCOTT,
L.L.P., Pittsburgh, Pennsylvania, for Appellants. Michael S. Seekings,
MULLEN, WYLIE & SEEKINGS, Charleston, South Carolina, for
Appellees. ON BRIEF: Timothy W. Bouch, G. Hamlin O’Kelley, III,
LEATH, BOUCH & CRAWFORD, Charleston, South Carolina, for
Appellants.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                             OPINION

HAMILTON, Senior Circuit Judge:

   In 1990, Sea Side Villas II Horizontal Property Regime and Sea
Side Villas II Home Owners Association (collectively referred to as
Sea Side) contracted with G.M. Kassem Roofing Systems, Inc. for the
installation of a new roof on one of Sea Side’s two condominium
buildings located in the Town of Hilton Head in South Carolina. After
experiencing numerous problems with the roof and failing in attempts
to cure the problems, Sea Side brought an action against G.M.
Kassem Roofing Systems, Inc. and Single Source Roofing Corpora-
tion in South Carolina state court alleging various claims based on the
defective installation of the roof.1 Following removal to federal court
and a bench trial, the district court ruled in favor of Sea Side on its
    1
   Single Source Roofing Corporation, a Pennsylvania corporation, is a
successor to G.M. Kassem Roofing Systems, Inc. For ease of reference,
we will refer to these entities as "SSR."
              SEA SIDE VILLAS v. SINGLE SOURCE ROOFING               3
negligence claim, but held in favor of SSR on the remaining claims,
including its counterclaim against Sea Side. The district court
awarded Sea Side damages on its negligence claim in the amount of
$85,900, which was the original contract price, and awarded SSR
$11,086.86 on its counterclaim. SSR noted an appeal, and Sea Side
noted a cross-appeal. For the reasons stated below, we affirm in part,
vacate in part, and remand for further proceedings consistent with this
opinion.

                                   I

                                  A

   Sea Side Villas II is a three-story condominium housing complex
located in the Town of Hilton Head and consists of two multi-unit
buildings. Sea Side Villas II Horizontal Property Regime is a horizon-
tal property regime organized under the laws of South Carolina. Sea
Side Villas II Home Owners Association is an organization which
governs the affairs of the Sea Side Villas II condominium housing
complex.

  In 1990, Sea Side contracted with SSR to replace the existing roof
on one of Sea Side’s buildings (the Building). In exchange for a pay-
ment of $85,900, SSR was to install its "G.M. Kassem Roofing Sys-
tems, Inc. E.P.D.M. Ultra-NP Roof System" on the Building. (J.A.
587).

   At the time of the roof installation, the Town of Hilton Head Build-
ing Code (the Code) mandated that, when the existing roof surface
was gravel or the like, the gravel had to be removed and an approved
base material installed before applying additional roofing. Notwith-
standing the dictates of the Code, SSR installed the new roof directly
over the existing roof without removing the existing gravel-based
roofing surface.

   In April 1991, SSR gave Sea Side two warranties, which included
coverage for roofing materials, insulation, attachments, fasteners,
membrane, the overall system, and the workmanship by SSR. One of
the warranties, the "Membrane Systems Warranty," stated that it did
4             SEA SIDE VILLAS v. SINGLE SOURCE ROOFING
not apply if the roofing system was damaged by natural disasters
including hurricanes and gales. (J.A. 433). The Membrane Systems
Warranty also excluded coverage for consequential damages arising
from the use or misuse of the roofing system. Finally, the "Membrane
Material Warranty" stated that SSR "shall not be liable for any inci-
dental, consequential, or other damages, including but not limited to,
loss of profits or damages to the structure or its contents arising under
any theory of law whatsoever." (J.A. 434).

   A few months after the roof had been installed, leakage problems
began to appear. Sea Side presented evidence at trial that the roof
began to leak early in its life and often, and that the roof was torn in
numerous places, particularly around fasteners which were used to
secure the roof to the plywood deck. SSR made numerous attempts
to repair the roof, but it failed to correct or cure the problems.

    SSR believed that raccoons caused the leakage problems by punc-
turing the roofing membranes which, in turn, created holes in the roof.
When SSR responded to the early service repair calls at the Building,
it advised Sea Side that the problems were not covered under any of
its warranties. SSR, however, made temporary repairs to the roof and
it later submitted a $25,000 proposal to Sea Side to cover permanent
repairs to the damaged roof. In December 1993, SSR agreed to
address another roof leakage problem, which it again contended was
damage not covered under either of the warranties issued to Sea Side.

   When the leaks in the roof reappeared in 1996, Sea Side retained
the services of Robert Baroni (Baroni), a roofing consultant and presi-
dent of Associated Construction Consultants, Inc., to advise it about
the roof problems and represent it with regard to further interaction
with SSR. After conducting an inspection of the roof, Baroni con-
cluded that the roof failed to provide the occupants of the Building
with the requisite protection because: (1) "the fiberboard insulation
had completely disintegrated underneath the rubber" and (2) a signifi-
cant number of fasteners that were designed to hold the roofing struc-
ture together came apart. (J.A. 121).

   In September 1998, Tropical Storm Earl moved through the Hilton
Head Island area with a Beaufort Wind Scale rating of nine, which
indicated the presence of winds in the range of forty-seven to fifty-
              SEA SIDE VILLAS v. SINGLE SOURCE ROOFING                  5
four miles per hour. The roof of the Building sustained further dam-
age which exposed the interior structure of the Building to water dam-
age. On or about September 4, 1998, SSR responded to Sea Side’s
service call. SSR indicated, however, that it wanted Baroni and a rep-
resentative of the company that managed Sea Side to be present when
the repairs were made. Upon arrival, SSR repair technicians informed
Baroni that the repair work would not be undertaken unless SSR was
given a guarantee of full payment in the amount of $11,086.86.
Baroni, in the presence of a representative of the company that man-
aged Sea Side, assured SSR that it would get paid. According to SSR,
the repairs were excluded under the Membrane Systems Warranty
because the damage was caused by gale force winds. Sea Side was of
the opinion, however, that the cost of repairs fell under the warranties
and refused to pay the $11,086.86.

   Also on September 4, 1998, Alan Campbell (Campbell), an engi-
neer with Campbell, Schneider and Associates, LLC, performed a
visual survey of the Building’s roof to determine the extent of the
damage that had been caused by Tropical Storm Earl. Campbell testi-
fied at trial that, if the roof was installed in compliance with the Code,
the fasteners on the roof should have been able to withstand "about
300 pounds [of pressure] in the corners, about 174 pounds along the
edge, and over 500 pounds in the field area of the roof." (J.A. 231).
Campbell further testified that the fasteners which held the roof
together were rated only for 100 pounds of pressure and therefore did
not meet Code requirements. Campbell concluded that the fasteners
should have been attached to a steel deck rather than a plywood deck.

   In February 2000, Sea Side contracted with Morris Roofing, Inc.
to complete the reroofing of the Building at a cost of $165,000. The
total cost of the demolition and reroofing the Building was $172,000.

                                    B

  In August 1999, Sea Side filed a complaint against SSR in South
Carolina state court asserting claims for breach of contract, breach of
express warranty, breach of implied warranty, and negligence. After
SSR removed the action to the United States District Court for the
District of South Carolina, SSR asserted a breach of contract counter-
6             SEA SIDE VILLAS v. SINGLE SOURCE ROOFING
claim based on Sea Side’s failure to pay $11,086.86 for repairs SSR
made to the roof in the aftermath of Tropical Storm Earl.

   Following a bench trial, the district court found in favor of Sea
Side on the negligence claim, but ruled in favor of SSR on the
remaining claims, including its breach of contract counterclaim
against Sea Side. The district court awarded Sea Side damages on its
negligence claim in the amount of $85,900, which was the original
contract price, and awarded SSR $11,086.86 on its breach of contract
counterclaim. Following the entry of the judgment, both Sea Side and
SSR moved to amend the judgment, and SSR further moved for a new
trial. The district court denied the motions and this timely appeal and
cross-appeal followed.2

                                   II

   On appeal, SSR argues that the district court erred when it permit-
ted the expert testimony of Baroni and Campbell asserting the admis-
sion of their testimony violated Rules 26 and 37 of the Federal Rules
of Civil Procedure. According to SSR, the admission of Baroni and
Campbell’s testimony prejudiced its defense to all claims asserted by
Sea Side, and in particular the negligence claim.

                                   A

   The facts surrounding SSR’s argument are as follows. On Septem-
ber 11, 2000, the district court entered an amended scheduling order
directing the parties to complete discovery by March 15, 2001. Sea
Side was directed to identify its expert witnesses by December 15,
2000 and SSR was to identify its expert witnesses by January 15,
2001. Nine months earlier, in January 2000, SSR had served written
interrogatories and a document request that, inter alia, asked Sea Side
to identify any expert witnesses and to provide any reports prepared
by its experts.
    2
    On cross-appeal, Sea Side does not challenge that portion of the dis-
trict court’s judgment which awarded SSR $11,086.86 on SSR’s breach
of contract counterclaim.
                SEA SIDE VILLAS v. SINGLE SOURCE ROOFING               7
   Sea Side did not identify any expert witness by the district court’s
December 15, 2000 deadline. Sea Side’s June 20, 2001 interrogatory
answers identified Baroni as one of five witnesses having knowledge
of the facts of the case and also identified Baroni as the only expert
witness Sea Side intended to call at trial. Sea Side also produced sev-
eral reports prepared by Baroni.

   On August 17, 2001, the district court notified the parties that the
case had been scheduled for a bench trial. The notice directed the par-
ties to, among other things,

    enter into written stipulations setting forth the qualifications
    of all expert witnesses in such form that they can be read to
    the Court by counsel at the time the expert witness takes the
    stand. A summary of each experts’ testimony shall be
    exchanged between the parties and given to the Court along
    with other pre-trial submissions.

(J.A. 28-29).

   Because the district court was closed for Columbus Day on Octo-
ber 8, 2001, the district court moved the trial date up to October 3,
2001. On October 1, 2001, the parties entered into a stipulation (the
Joint Stipulation) which summarized each expert’s qualifications and
summarized the testimony each expert intended to give.

  At trial, SSR timely objected to any expert testimony from Baroni,
but did not timely object to the admission of Campbell’s expert testi-
mony. As to SSR’s objection to Baroni’s testimony, after a lengthy
colloquy with counsel, the district court overruled the objection.

                                   B

   Rule 26(a)(2)(A) requires disclosure of the identity of any expert
witness. Rule 26(a)(2)(B) requires the expert to prepare a report con-
taining, among other things, "a complete statement of all opinions to
be expressed and the basis and reasons therefor," the "data or other
information considered by the witness in forming the opinions," and
"the qualifications of the witness." Fed. R. Civ. P. 26(a)(2)(B). Rule
8              SEA SIDE VILLAS v. SINGLE SOURCE ROOFING
26(a)(2)(C) requires the report to be disclosed at least ninety days
before trial or within thirty days after the opposing party has made its
disclosures.

   In this case, Sea Side did not satisfy Rule 26 for either Baroni or
Campbell, a fact Sea Side does not dispute. To be sure, Sea Side
never filed a report prepared and signed by Baroni that provided all
of the information required by Rule 26. In addition, Campbell’s report
was not produced until the eve of trial.

   According to Rule 37(c)(1), a "party that without substantial justifi-
cation fails to disclose information required by Rule 26(a) . . . is not,
unless such failure is harmless, permitted to use as evidence at trial
. . . any witness or information not so disclosed." Fed. R. Civ. P.
37(c)(1). Rule 37(c)(1) thus does not require witness preclusion for
untimely disclosure if there is a substantial justification for the non-
disclosure or if missing the deadline is harmless. Newman v. GHS
Osteopathic, Inc., Parkview Hosp. Div., 60 F.3d 153, 156 (3d Cir.
1995). The district court has broad discretion in deciding whether a
Rule 26(a) violation is substantially justified or harmless. Mid-
America Tablewares, Inc. v. Mogi Trading Co., 100 F.3d 1353, 1363
(7th Cir. 1996).

   Sea Side offers no justification, substantial or otherwise, for its fail-
ure to provide SSR with the expert reports that complied with Rule
26. To be sure, Sea Side hired Baroni more than three years before
it brought this action and Campbell inspected the roof nearly a year
before the action was filed. Thus, Sea Side had more than ample
opportunity to comply with Rule 26.

   We conclude, however, that the admission of Baroni and Camp-
bell’s testimony was harmless. The parties voluntarily signed and
filed the Joint Stipulation, wherein the parties agreed upon the qualifi-
cations of Baroni and Campbell as experts and the document outlined
the projected testimony of Baroni and Campbell. As to Baroni, the
Joint Stipulation stated that: (1) it is stipulated between the parties
that Baroni "is qualified as an expert to testify in the following areas:
building code violations, construction defects and roofing problems";
(2) Baroni "has extensive experience with the roof at issue in this
case"; and (3) the roof, "as installed, did not meet construction
              SEA SIDE VILLAS v. SINGLE SOURCE ROOFING                   9
requirements, manufacturer’s specifications, industry standards or
building code requirements." (J.A. 36-37). As to Campbell, the Joint
Stipulation stated: (1) it is stipulated between the parties that Camp-
bell "is qualified as an expert to testify in the following areas: evalua-
tion of structural defects, defective construction, building code
violations and roofing problems"; and (2) Campbell "will testify con-
sistent with his report attached thereto, briefly summarized as follows
. . . [f]ailure of the roof was a direct result of a major violation of the
Standard Building Code." (J.A. 35-36). Baroni and Campbell’s testi-
mony at trial did not deviate from that outlined in the Joint Stipula-
tion. SSR agreed to the language of the Joint Stipulation and
acknowledged that it accepted and recognized the qualifications of
both Baroni and Campbell and knew that the expert witnesses would
express their opinions related to the roof installation and failure. By
signing the Joint Stipulation, SSR acknowledged the experts, accepted
the experts, recognized the qualifications of the experts, and stipu-
lated that they would testify in accordance with the Joint Stipulation
at trial. Because SSR voluntarily signed and agreed to the Joint Stipu-
lation, it cannot be said that SSR was surprised or did not have an
adequate opportunity to prepare for trial. Cf. Ortiz-Lopez v. Sociedad
Espanola de Auxilio Mutuo Y Beneficiencia de Puerto Rico, 248 F.3d
29, 35 (1st Cir. 2001) ("The purpose of a ‘detailed and complete’
expert report as contemplated by Rule 26(a) . . . [is to] prevent an
ambush at trial."). Accordingly, we find no abuse of discretion by the
district court in permitting the expert testimony of Baroni and Camp-
bell.

                                    III

   On cross-appeal, Sea Side argues that the district court erroneously
limited its damages on its negligence claim to the original contract
amount paid to SSR in 1990, $85,900, rather than the $172,000 Sea
Side spent in 1999 to install a new roof on the Building. Noting that
the general rule of damages in negligence actions is to place the
injured party in the same situation it would have occupied if the
wrong had not been committed, the district court reasoned that its
damage award "reflected its assessment of the proper amount of dam-
ages that would adequately compensate the plaintiffs for the defen-
dants’ negligent installation of the roof in question." (J.A. 648).
Through its damage award, the district court apparently sought to
10            SEA SIDE VILLAS v. SINGLE SOURCE ROOFING
restore Sea Side to the position it occupied in 1990 before SSR
installed the roof by returning the purchase price and leaving Sea Side
with a roof that needed to be replaced.

   South Carolina’s economic loss rule provides that, where a buyer’s
expectations in a sale are frustrated because the product does not
work properly, the buyer’s remedies are limited to those prescribed
by the law of contract. Kennedy v. Columbia Lumber and Mfg. Co.,
384 S.E.2d 730, 736 (S.C. 1989). This doctrine demarcates the bound-
ary between contract law and tort law in product liability cases by
helping to determine which theories are applicable in a given action.
Bishop Logging Co. v. John Deere Indus. Equip. Co., 455 S.E.2d 183,
188 (S.C. Ct. App. 1995). Its contours and rationale have been care-
fully explained in Myrtle Beach Pipeline Corp. v. Emerson Elec. Co.,
843 F. Supp. 1027, 1049-56 (D.S.C. 1993), aff’d, 46 F.3d 1125 (4th
Cir. 1995) (unpublished table decision). Most fundamentally, the eco-
nomic loss rule distinguishes between transactions involving the sale
of goods, where contract law protects economic expectations, and
transactions involving the sale of defective products to individual
consumers, whose injuries are traditionally remedied by the law of
torts. Id. at 1049.

   In this case, Sea Side contracted for the installation of a roof sup-
plied by SSR. The predominant thrust of this transaction was to pro-
vide and install the roof. At first blush, then, the economic loss rule
would seem to bar any negligence claim. Indeed, the economic loss
rule bars a negligence claim "where duties are created solely by con-
tract." Kennedy, 384 S.E.2d at 737. Where there is a special relation-
ship between the parties that is independent of the contract, however,
there exists a duty of care whose breach will support a tort claim.
Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones &
Goulding, Inc., 463 S.E.2d 85, 88 (S.C. 1995). For example, South
Carolina courts have permitted negligence claims to proceed against
accountants and attorneys based on their professional duties to plain-
tiffs. Id. While no special relationship exists between SSR and Sea
Side, a violation of a building code violates a legal duty for which a
builder can be held liable in tort to the homeowner. Kennedy, 384
S.E.2d at 737; see also Beachwalk Villas Condo. Ass’n, Inc. v. Mar-
tin, 406 S.E.2d 372, 373-74 (S.C. 1991) (holding an architect can be
liable for negligence and breach of an implied warranty even though
              SEA SIDE VILLAS v. SINGLE SOURCE ROOFING                11
no privity exists between the architect and the condominium home-
owners association); cf. Palmetto Linen Serv., Inc. v. U.N.X., Inc., 205
F.3d 126, 129 (4th Cir. 2000) (holding that, in case involving the
installation and malfunction of a chemical dispensing system used for
commercial washers that resulted in destruction of linens, South Caro-
lina economic loss rule precluded negligence claim because, among
other things the plaintiff did not "claim that defendants violated any
code provision or contravened any industry standard"). This well-
recognized exception to South Carolina’s economic loss rule allows
Sea Side to assert a negligence claim for building code violations.

   In a construction case such as this, the measure of damages that
must be awarded as a result of a builder’s negligence is the reasonable
cost to repair. See, e.g., Scott v. Fort Roofing and Sheet Metal Works,
Inc., 385 S.E.2d 826, 827 (S.C. 1989) ("Cost of repair or restoration
is a valid measure of damages for injury to a building although com-
pensation may be limited to the value of the building before the dam-
age was inflicted."); Coleman v. Levkoff, 122 S.E. 875, 876 (S.C.
1924) ("If . . . the owner has the property repaired and restored to a
condition in which its market value equals or exceeds the market
value before the injury, the measure of damages in that case is the rea-
sonable cost of restoring the property to its previous condition.").
Consequently, in order to restore Sea Side to its preinjury status and
to compensate Sea Side for the negligent actions of SSR, the measure
of damages is the reasonable cost to repair the defectively installed
roof.

   In this case, however, in calculating the award of damages, the dis-
trict court did not calculate the reasonable cost to repair the roof, but
rather used the original contract price to restore Sea Side to the posi-
tion it occupied in 1990—the need for a new roof on one of its build-
ings. This was error. Id. The district court should have calculated the
reasonable cost to repair the roof and awarded damages based on that
finding. Accordingly, a remand is required for further factual findings
concerning the reasonable cost to repair the roof.3
  3
   We note that Sea Side introduced evidence below that it spent
$172,000 installing a new roof on the Building. There is also evidence
in the record suggesting that the new roof contained additional features
12            SEA SIDE VILLAS v. SINGLE SOURCE ROOFING
   Sea Side also claims that the district court erred by disallowing
damages for interior repairs which flowed from the negligence cause
of action. According to Sea Side, the district court improperly held
that the damage to the interior of the Building was excluded and not
recoverable pursuant to the provisions of the Membrane Systems
Warranty and Membrane Material Warranty which excluded coverage
for consequential damages.

   We agree with Sea Side that the Membrane Systems Warranty and
the Membrane Material Warranty cannot be used to defeat its right to
proceed against SSR on a negligence theory. Under South Carolina
law, the election of remedies is the act of choosing between different
remedies allowed by law on the same set of facts. Jones v. Winn-Dixie
Greenville, Inc., 456 S.E.2d 429, 431 (S.C. Ct. App. 1995). Its pur-
pose is to prevent double recovery for a single wrong. Save Charles-
ton Found. v. Murray, 333 S.E.2d 60, 64 (S.C. Ct. App. 1985). Where
a party has asserted only one primary wrong, he is entitled to only one
recovery. Jones, 456 S.E.2d at 432. However, the principle has no
application where two separate causes of action, each based on differ-
ent facts, exist. Robert Harmon and Bore, Inc. v. Jenkins, 318 S.E.2d
371, 376 (S.C. Ct. App. 1984).

    In this case, because Sea Side’s negligence, breach of contract, and
breach of warranty claims are based upon the same facts and because
Sea Side’s damages on its breach of contract and breach of warranty
claims would be cumulative to the damages on its negligence claim,
Sea Side was entitled to proceed solely on its negligence claim, and
it in fact prevailed on that claim. Once Sea Side prevailed on its negli-
gence claim, its remaining theories for recovery (breach of contract
and breach of warranty) became irrelevant. The only issue before the
district court in assessing damages under Sea Side’s negligence claim
was whether the damages to the roof and the damages to the interior

that Sea Side rejected as too expensive when it contracted with SSR in
1990. Of course, Sea Side is not entitled to be placed in a superior posi-
tion by asking SSR to pay the cost of providing Sea Side with a more
expensive and technologically superior roof. Rather, as noted above, Sea
Side is entitled to damages equaling the reasonable cost to repair the
roof.
              SEA SIDE VILLAS v. SINGLE SOURCE ROOFING                13
of the Building were proximately caused by the building code viola-
tions. The Membrane Systems Warranty and the Membrane Material
Warranty were irrelevant to this determination and should not have
been considered by the district court.4

  In summary, because the district court made no factual findings
concerning whether the damage to the interior of the Building was
proximately caused by SSR’s negligence, i.e., violation(s) of the
Code, a remand for further factual development is necessary.

                                   IV

   As noted above, under South Carolina law, the election of remedies
is the act of choosing between different remedies allowed by law on
the same set of facts. Jones, 456 S.E.2d at 431. Because Sea Side’s
negligence, breach of contract, and breach of warranty claims are
based upon the same facts and because Sea Side’s damages on its
breach of contract and breach of warranty claims would be cumula-
tive to the damages on its negligence claim, we decline to address Sea
Side’s arguments attacking the district court’s dismissal of Sea Side’s
breach of contract and breach of warranty claims. Cf. Minyard Enter.,
Inc. v. Southeastern Chem. & Solvent Co., 184 F.3d 373, 381 n.10
(4th Cir. 1999) ("Because Minyard’s negligence and breach of con-
  4
   In any event, even if we were to conclude that the district court was
correct in examining the Membrane Systems Warranty and the Mem-
brane Material Warranty in assessing whether Sea Side was entitled to
recover for damages to the interior of the Building, we would reach the
same result. In Waters v. Massey-Ferguson, Inc., 775 F.2d 587 (4th Cir.
1985), applying South Carolina law, we permitted recovery of conse-
quential damages to a farmer flowing from a defective tractor, even
though the warranty the farmer received from the defendant contained an
exclusion of such damages. We held that recovery was permissible under
the narrow facts of the case because the parties premised the warranty
provisions on certain repairs being made, but repair efforts never proved
successful. Id. at 591-92. Once repair became impossible, we held that
the limitation of consequential damages no longer applied. Id. In this
case, SSR, like the defendant in Waters, had numerous opportunities to
repair the roof, but such attempts failed. Under such circumstances, the
limitations on consequential damages contained in the Membrane Sys-
tems Warranty and the Membrane Material Warranty would not apply.
14            SEA SIDE VILLAS v. SINGLE SOURCE ROOFING
tract claims are based upon the same facts, and because we conclude
Minyard may recover based upon his negligence claim, we do not
reach its breach of contract claim.").

                                  V

   For the reasons stated herein, the judgment of the district court is
affirmed in part, vacated in part, and the case is remanded for further
proceedings consistent with this opinion.

                        AFFIRMED IN PART, VACATED IN PART,
                                            AND REMANDED