United States District Court, D. South Carolina, Orangeburg Division
ORDER AND OPINION
action arises from a contract dispute between Plaintiff
Phillips and Jordan, Inc., and Defendants Western Surety
Company (“WSC”) and McCarthy
Improvement Company (“MIC”) (collectively
“Defendants”). The matters before the court are
Plaintiff's and Defendants' Motions for Partial
Summary Judgment (ECF Nos. 83, 84, 85). For the reasons set
forth below, the court DENIES
Plaintiff's and Defendants' motions.
court has subject matter jurisdiction pursuant to 28 U.S.C.
§ 1332(a) (2012). (ECF Nos. 11 at 1 ¶ 4; 18 at 15,
18 ¶¶ 1-2, 18.) Diversity jurisdiction requires
complete diversity of parties and an amount in controversy in
excess of $75, 000.00, exclusive of interest and costs.
See 28 U.S.C. §1332(a). Complete diversity of
parties in a case means that no party on one side may be a
citizen of the same state as any party on the other side.
See Owen Equip. & Erection Co. v. Kroger, 437
U.S. 365, 372 (1978). There is diversity jurisdiction in this
case because the parties have sufficiently pleaded that
Plaintiff is organized under the laws of North Carolina and
has a principal place of business in Tennessee; WSC is
organized under the laws of, and has a principal place of
business in, South Dakota; and that MIC is organized under
the laws of, and has a principal place of business in, Iowa.
(ECF Nos. 11 at 1 ¶¶ 1-3; 18 at 15 ¶ 2.)
FACTUAL AND PROCEDURAL BACKGROUND
September 23, 2013, MIC contracted with the South Carolina
Department of Transportation (“SCDOT”) on a
design-build project known as the “Interstate 95/U.S.
Route 301 Interchange & South Carolina Route 6
Connector” in Orangeburg, South Carolina. (ECF No. 1-1
at 1-79.) MIC entered a subcontract with Plaintiff on October
14, 2014 to work on part of the project. (ECF No. 1-3 at 1
(“By means of this Agreement, [Plaintiff] does agree to
furnish, erect[, ] and install all materials and perform all
work and in every respect complete the [project] . . .
.”).) Plaintiff characterizes the subcontract as an
agreement “to perform dirt work on the
[p]roject.” (ECF No. 83 at 5 (citing ECF No. 1-3 at
1-55).) Plaintiff claims that shortly after the execution of
the subcontract, MIC issued a schedule to Plaintiff with a
date of completion in June 2015. (ECF Nos. 83-2 at 19; 84-10
at 9.) MIC's plan for securing and providing the
quantities of fill to build the roadway embankment
“primarily relied upon an assumption that enough
quantities of acceptable soils could be obtained by
over-excavating the onsite detention ponds.” (ECF No.
4, 5 ¶ 28; see e.g., 83-1 at 3.) However,
Plaintiff alleges that soon after it began performance in
2014, “the quality of the onsite soils to be excavated
and used as fill became suspect.” (Id. at 6
¶ 34.) Plaintiff alleges that “substantial
quantities of the onsite soils failed to meet the required
specifications for use as fill material, which was contrary
to MIC's design and plan for the [p]roject, ” and
“MIC was slow to import suitable material for use by
Plaintiff as fill, as required by the subcontract.”
(Id. at 6 ¶ 35.) According to the parties, the
subcontract does not include any obligation or requirement
for Plaintiff to furnish or supply any fill material. (ECF
Nos. 11 at 7 ¶ 40; 18 at 5 ¶ 40 (citing ECF No. 1-3
at 1-55).) Defendants generally deny Plaintiff's
allegations and contend that “the parties did later
discuss [Plaintiff] paying for imported fill as means to
allow [Plaintiff] to increase its inadequate production rates
for its work” by way of a “gentleman's
agreement.” (ECF No. 83-6 at 15-18.)
1, 2018, Plaintiff filed an Amended Complaint asserting five
claims: Count I: Breach of Contract against MIC (ECF No. 11
at 11 ¶¶ 77-83); Count II: Quantum Meruit / Unjust
Enrichment against MIC (ECF No. 11 at 12 ¶¶ 84-90);
Count III: Violation of South Carolina's Prompt Pay Act,
SC Code Ann. § 29-6-30 (2019), against MIC (ECF No. 11
at 13 ¶¶ 91-95); Count IV: Recovery of
Attorney's Fees and Interest for Improvement of Real
Estate against MIC and WSC pursuant to S.C. Code Ann. §
27-1-15 (2019) (ECF No. 11 at 14 ¶¶ 96-105); and
Count V: Breach of Payment Bond against MIC and WSC. (ECF No.
11 at 15 ¶¶ 106-112). Defendants filed an Answer
and Counterclaim against Plaintiff on June 15, 2018,
asserting one count of breach of contract. (ECF No. 18 at 17
¶¶ 15-18.) On October 15, 2019, Plaintiff filed a
Motion for Partial Summary Judgment. (ECF No. 84.) Defendants
filed separate Motions for Partial Summary Judgment the same
day. (ECF Nos. 84, 85.) The parties filed Responses on
October 29, 2019 (ECF Nos. 92, 94, 95), and Replies on
November 5, 2019 (ECF Nos. 108, 109, 110).
judgment should be granted “if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A fact is “material” if proof
of its existence or non-existence would affect the
disposition of the case under the applicable law. See
Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248-49
(1986). A genuine question of material fact exists where,
after reviewing the record, the court finds that a reasonable
jury could return a verdict for the nonmoving party. See
Newport News Holdings Corp. v. Virtual City Vision, 650
F.3d 423, 434 (4th Cir. 2011). In ruling on a motion for
summary judgment, a court must view the evidence in the light
most favorable to the nonmoving party. Perini Corp. v.
Perini Constr., Inc., 915 F.2d 121, 123-24 (4th Cir.
1990). The nonmoving party may not oppose a motion for
summary judgment with mere allegations or denial of the
movant's pleading, but instead must “set forth
specific facts” demonstrating a genuine issue for
trial. See Fed. R. Civ. P. 56(e); see also
Celotex Corp. v. Catrett, 477 U.S. 317, 324, (1986);
Anderson, 477 U.S. at 252; Shealy v.
Winston, 929 F.2d 1009, 1012 (4th Cir. 1991). All that
is required is “sufficient evidence supporting the
claimed factual dispute be shown to require a jury or judge
to resolve the parties' differing versions of the truth
at trial.” Anderson, 477 U.S. at 249.
Plaintiff's Motion for Partial Summary Judgment
The Parties' Arguments
claims that MIC “failed to plead a claim for breach of
oral contract and its claims for damages thereupon should be
dismissed.” (ECF No. 83 at 8.) Plaintiff asserts that
the court should grant summary judgment because “[MIC]
failed to properly plead any claim based on the alleged oral
agreement, and because the oral agreement is not enforceable
due to lack of consideration, lack of specificity, and the
South Carolina Statute of Frauds.” (Id. at 3.)
claim that they have not “alleged or plead[ed] a claim
for breach of oral contract[, ]” but rather allege an
oral modification that is not separate from the subcontract.
(ECF No. 95 at 16.) Defendants assert that (1) “the
oral modification has consideration, including benefits to
[Plaintiff] and forbearance by [MIC]; (2) “the oral
modification is specific enough to be enforceable”; and
(3) that “the statute of frauds does not apply to the
oral modification.” (Id. at 3, 19, 23.)
The Court's Review
South Carolina, “[w]ritten contracts may be orally
modified by the parties, even if the writing itself prohibits
oral modification.” Carolina Amusement Co. v.
Connecticut Nat. Life Ins. Co., 437 S.E.2d 122, 126
(S.C. Ct. App. 1993) (citing S.C. Nat'l Bank v.
Silks, 367 S.E.2d 421, 422 (S.C. Ct. App. 1988)). An
oral modification must include consideration. A
PAC-Carolina, Inc. v. Towns of Allendale and Fairfax,
S.C., 868 F.Supp. 815, 825 (D.S.C. 1993). Consideration
is “some right, interest, profit or benefit accruing to
one party or some forbearance, detriment, loss or
responsibility given, suffered or undertaken by the
others.” McPeters v. Yeargin Const. Co., Inc.,
350 S.E.2d 208, 211 (S.C. Ct. App. 1986).
the parties disagree over material facts regarding the
alleged oral modification. For example, Plaintiff casts doubt
as to the validity of the “gentleman's
agreement” between executives representing Plaintiff
[I]n 2015, Joe Bush, then-President of [MIC], testified that
he had a ‘brief meeting' between five and ten
minutes long with Patrick ...