United States District Court, D. South Carolina, Charleston Division
ORDER AND OPINION
RICHARD MARK GERGEL UNITED STATES DISTRICT COURT JUDGE
matter is before the Court on Coastal Elevators & Lifts,
LLC's ("Coastal") motion for summary judgment
(Dkt. No. 120). For the reasons set forth below, the Court
denies the motion.
April 4, 2015, Plaintiff Corinne Voeltz rented a condominium
at 113 East Arctic Avenue, Unit C in Folly Beach, South
Carolina (the "property"). (Dkt. No. 148-2 at 8 -
9.) On April 4, 2015, Plaintiff was on the first floor (one
floor up from the ground floor) of the property and opened an
access door to the elevator. (Id. at 22 - 23, 34.)
Plaintiff then stepped through the door and fell down the
elevator shaft because the elevator was not at the floor.
(Id.) The elevator was manufactured by Defendant
Waupaca Elevator Company, Inc. and was purchased and
installed in 2008 and 2009 by Defendant Colson Electric &
Elevators, Inc. ("Colson"). (Dkt. Nos. 120-1;
120-2; 120-3.) At the time, Defendant Easterlin Company
("Easterlin") was the general contractor, and
Defendant JEM Development, LLC was the owner and developer of
the property. (Dkt. No. 123-3 at 5 - 6.) The property was
later sold and, at the time of the incident, the property was
owned by Defendant Bridge Charleston Investments E, LLC
("Bridge Charleston") and managed by Defendant
Luxury Simplified Retreats ("Luxury Simplified").
(Dkt. No. 94 - 1 at 7.) Colson ceased operations in 2011.
However, in the same year, the then-owner of Colson, Allison
Williams, opened Defendant Coastal, the party moving for
summary judgment here.
brought claims against Coastal for negligence, strict
liability and breach of warranty. (Dkt. No. 33.) Defendants
Bridge Charleston and Luxury Simplified, cross-claimants,
brought claims against Coastal for negligence, strict
liability, breach of implied and express warranty, breach of
contract, indemnity and contribution. (Dkt. No. 41.) Finally,
Defendant Easterlin, a cross-claimant, brought a claim
against Coastal for indemnification. (Dkt. No. 65.)
moves for summary judgment on all claims solely related to
the alleged purchase and installation of the elevator. (Dkt.
No. 120 at 5.) Coastal explicitly does not seek summary
judgment related to its repair of the elevator in 2014.
(Id.) Coastal largely argues that it cannot be held
liable for the purchase and installation of the elevator in
2008 and 2009 since it did not exist until 2011 and it was
Colson, rather than Coastal, that purchased and installed the
elevator. Defendant Easterlin opposes the motion. (Dkt. No.
124.) Plaintiff Voeltz initially opposed the motion (Dkt. No.
122), but later clarified that it did not oppose summary
judgment on the issue that Defendant Coastal was not the
purchaser and installer of the elevator since Williams
testified that she installed the elevator, but not while
doing business as Coastal. (Dkt. No. 175.)
prevail on a motion for summary judgment, the movant must
demonstrate that there is no genuine issue of any material
fact and that the movant is entitled to judgment as a matter
of law. Fed.R.Civ.P. 56(a). The party seeking summary
judgment has the burden of identifying the portions of the
"pleadings, depositions, answers to interrogatories, any
admissions on file, together with the affidavits, if any,
which show there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter
of law." Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). The Court will construe all inferences and
ambiguities against the movant and in favor of the non-moving
party. U.S. v. Diebold, Inc., 369 U.S. 654, 655
(1962). The existence of a mere scintilla of evidence in
support of the non-moving party's position is
insufficient to withstand a motion for summary judgment.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986). However, an issue of material fact is genuine if the
evidence is such that a reasonable jury could return a
verdict in favor of the non-movant. Id. at 257.
the moving party has carried its burden under Rule 56(c), its
opponent must do more than simply show that there is some
metaphysical doubt as to the material facts."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). "In the language of the Rule,
the nonmoving party must come forward with 'specific
facts showing that there is a genuine issue for
trial.'" Id. at 587. "Where the record
taken as a whole could not lead a rational trier of fact to
find for the non-moving party, there is no 'genuine issue
for trial.'" Id. (quoting First
Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S.
253, 289 (1968)).
for the strict liability causes of action, Defendant Coastal
argues exclusively that it cannot be held liable for any of
Plaintiff Voeltz or Defendants Bridge Charleston, Luxury
Simplified and Defendant Easterlin's causes of action
related to the sale and installation of the elevator since it
did not exist at the time of sale in 2008 and 2009. (Dkt. No.
120.) However, Defendant Coastal's argument is misplaced,
as it can still be held liable for the actions of a
predecessor where: "1) there was an agreement to assume
such debts, (2) the circumstances surrounding the transaction
warrants a finding of a consolidation or merger of the two
corporations, (3) the successor company was a mere
continuation of the predecessor, or (4) the transaction was
entered into fraudulently for the purpose of wrongfully
defeating creditors' claims." Simmons v. Mark
Lift Indus., Inc., 622 S.E.2d 213, 215 (2005) (citations
omitted). The mere continuation factor applies "when
there is commonality of ownership, i.e., the predecessor and
successor corporations have substantially the same officers,
directors, or shareholders." Id. at 215 n.l.
See also Nationwide Mut. Ins. Co. v. Eagle Window &
Door, Inc., 424 S.C. 256, 818 S.E.2d 447 (2018).
Easterlin presents evidence that Allison Williams was the
sole shareholder and owner of Colson Electric when she
purchased the company in 2005 until it closed in 2011. (Dkt.
No. 124-6 at 5.) Further, Easterlin presented evidence that,
at the same time she was closing Colson, Williams opened
Coastal and was similarly the sole shareholder and owner.
(Id.) Neither company has had any other officers or
directors. (Id.) Coastal attempts to rebut this
evidence by arguing that, up until 2005, another individual,
Wayne Colson, owned the business. (Dkt. No. 130-5 at ¶
2.) However, that fact is irrelevant to whether, in 2011,
Coastal served as a mere continuation of Colson. Further,
Coastal argues, relying on a case from the Western District
of Virginia, that the Court should apply a multi-factor test
to assess whether Coastal is a "mere continuation"
of Colson. See Dixon Lumber Co., Inc. v. Austinville
Limestone Co., Inc., 256 F.Supp.3d 658, 674 (W.D. Va.
2017). However, the test proposed by Coastal does not require
commonality of ownership and only asks "whether and to
what extent there is an identity of ownership," and
instead is a multi-factor test asking whether a company
continues the enterprise of a predecessor. Id.
However, the South Carolina Supreme Court rejected "the
enterprise theory of successor liability" and instead
"limit[s] the mere continuation exception to cases
whether there is commonality of officers, directors, and
shareholders." Nationwide, 424 S.C. at 267 -
Therefore, there is a dispute of material fact regarding
whether Coastal is a successor to Colson, and Coastal is not
entitled to summary judgment as to the claims for negligence,
breach of warranty, breach of contract, indemnity and
strict liability, both Plaintiff Voeltz and Defendants Bridge
Charleston and Luxury Simplified brought a cause of action
for strict liability against Coastal as the seller of the
elevator. S.C. Code Ann. § 15-73-10 et
seq. provides for liability against a seller of a
defective product in certain circumstances. The Supreme Court
of South Carolina explained that the law does "not apply
to services." See In re Breast Implant Prod. Liab.
Litig., 331 S.C. 540, 546, 503 S.E.2d 445, 448 (1998)
(holding health care providers were not "sellers"
as the breast implant procedure, though it included a breast
implant, was primarily a "service and not a
product.") Coastal argues that applies here, as it
provides a service, elevator installation, rather than a
product. (Dkt. No. 120 at 9.) However, when confronted with
similar facts in Trident Const. Co. v. Austin Co.,
272 F.Supp.2d 566, 573 (D.S.C. 2003), off dsub nom.
Trident Constr. Co. v. Austin Co., 93 Fed.Appx. 509 (4th
Cir. 2004), the court denied summary judgment to a
construction company that installed pre-fabricated airplane
hangars, reasoning that its primary business was
"selling and erecting steel hangars."
Id. Here, the record evidence creates a dispute of
material fact regarding whether Colson, as a potential
predecessor to Coastal, was merely in the business of
installing elevators or acted as both the seller and
installer. For example, the invoices submitted with
Coastal's motion demonstrate that its contract was both
for the sale of the actual elevator and installation. (Dkt.
Nos. 120-1; 120-2; 120-3.) Coastal has failed to demonstrate
that it is primarily a provider of services rather than a
seller, and therefore is not entitled to summary judgment on
the strict liability claims.
Coastal also seeks summary judgment on Easterlin's claim
for indemnification. (Dkt. No. 120 at 9 - 10.) For the same
reasons as above, Easterlin's cause of action for
indemnity survives summary judgment, as Easterlin created a
dispute of fact that that Coastal is the successor to Colson,
that Coastal was liable for Plaintiffs damages, that
Easterlin was not responsible for the liability, and that