This case concerns the interplay between the Subcontractors' and Suppliers' Payment Protection Act (SPPA)
In 2002, the City issued a request for proposals for the design and construction of a spec building. Thereafter, the City contracted with Gilbert for the project, the cost of which totaled approximately $875,000. Gilbert entered into contractual agreements with various subcontractors, including Respondents. The City did not require Gilbert to secure a payment bond, and it is undisputed no payment bond was secured. Ultimately, Gilbert failed to fully compensate all of the subcontractors after they completed work on the project.
At the project's completion, the City contended it owed $111,270 on its contract with Gilbert. Respondents also had significant unpaid invoices.
In 2003, Respondents filed a Complaint against the City, alleging the City should be required to pay the amounts owed under their respective subcontracts because the City failed to require Gilbert to secure a payment bond in violation of S.C.Code Ann. section 29-6-250.
In 2004, Judge Paul Short granted the City's motion to strike Respondents' request for attorney's fees.
In August 2005, Respondents filed an Amended Complaint against the City and Gilbert, asserting third-party beneficiary status of the contract between the City and Gilbert, alleging
Thereafter, Judge Steven John granted the City's motion to strike Respondents' claims for attorney's fees and prejudgment interest. Judge John noted that Judge Short's previous order stated Respondents' original complaint sounded in tort, and that attorney's fees and prejudgment interest were not available under the TCA. Judge John held that Judge Short's unappealed order "constitute[d] the law of the case," which he was "bound to apply."
Subsequently, both parties moved for summary judgment. Judge John Few granted the City's motion for summary judgment on all of Respondents' causes of action and denied Respondents' motion. Judge Few found Respondents' claims sounded in tort and were barred by the TCA. Additionally, Judge Few held that a governmental entity's violation of the SPPA does not give rise to a private cause of action by a subcontractor.
In reviewing a grant of summary judgment, the appellate court applies the same standard as the trial judge under Rule 56(c), SCRCP. Bovain v. Canal Ins., 383 S.C. 100, 105, 678 S.E.2d 422, 424 (2009). Summary judgment is proper if, viewing the evidence in a light most favorable to the nonmoving party, there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Id.
With the enactment of the TCA in 1986, the legislature intended to remove the common law bar of sovereign immunity in certain circumstances, but only to the extent legislatively authorized. See S.C.Code Ann. § 15-78-20 (declaring it is the public policy of the state that government entities are only
Thereafter, in 2000, the legislature enacted the SPPA. The SPPA reads in pertinent part as follows:
S.C.Code Ann. § 29-6-250 (emphasis added).
It is the interplay of these two statutory schemes which is implicated in the present case. Both parties rely on Sloan I to advance their respective positions.
In Sloan I, this Court addressed whether a subcontractor may bring a private right of action against a governmental entity for failure to comply with the statutory bonding requirements of the SPPA. A subcontractor working on a state highway maintenance project brought claims against the Department of Transportation (SCDOT) for its alleged failure to comply with the bonding requirements of the SPPA. The subcontractor brought an action for negligence against SCDOT pursuant to the TCA and a breach of contract claim alleging SCDOT was obligated to it, as a third-party beneficiary to the contract between SCDOT and the contractor, to ensure that the contractor was properly bonded pursuant to the SPPA.
We held the SPPA is specifically applicable to subcontractors and suppliers on government projects and outlines a detailed bonding scheme that significantly expands the protections already afforded these parties. Sloan I, 377 S.C. at 114, 659 S.E.2d at 161. However, the Court noted the SPPA does
Specifically addressing the third-party beneficiary claim, the Court relied on the reasoning of the Seventh Circuit Court of Appeals in A.E.I. Music Network, Inc. v. Bus. Computers, Inc., 290 F.3d 952 (7th Cir.2002). In A.E.I., the Seventh Circuit explained that the statutory bond requirement, which is similar to this state's, was a contractual term incorporated by the legislature. In creating the bond requirement, the Seventh Circuit reasoned the legislature intended public works construction contracts to protect subcontractors. A.E.I., 290 F.3d at 955. Thus, the A.E.I. court held the subcontractor's claim as a third-party beneficiary sounded in common law as a claim for breach of contract. Id. at 957.
We found A.E.I.'s analysis persuasive and stated:
Sloan I, 377 S.C. at 120, 659 S.E.2d at 165 (emphasis added).
The Sloan I Court did not address the subcontractor's negligence claim in the body of the opinion. However, in footnote five, which is the source of the apparent confusion in the current appeal, the Court stated:
Id. at 118, 659 S.E.2d at 164, n. 5 (emphasis added).
We find footnote five is clear and presents no ambiguity. The TCA forecloses a tort action under the SPPA. Indeed, this Court must presume the legislature knew of and contemplated the TCA in enacting the SPPA. See State v. McKnight, 352 S.C. 635, 648, 576 S.E.2d 168, 175 (2003) ("There is a presumption that the legislature has knowledge of previous legislation as well as of judicial decisions construing that legislation when later statutes are enacted concerning related subjects."). The TCA is the sole and exclusive remedy for tort actions against the government. See S.C.Code Ann. § 15-78-200 ("Notwithstanding any other provisions of law, [the TCA] is the exclusive and sole remedy for any tort committed by an employee of a governmental entity while acting within the scope of the employee's official duty."). And, subsection (4) of section 15-78-60
Finally, after expressly stating that "the government may be liable to a subcontractor for breach of contract for failing to comply with the SPPA bonding requirements[,]" we addressed the extent of governmental liability under the SPPA. Sloan I, 377 S.C. at 120, 659 S.E.2d at 165(emphasis added). The Court observed that "in a tort or a contract action arising under the SPPA, the government entity's liability is limited to the remaining unpaid balance on the contract with the general contractor when the subcontractor notifies the government of the general contractor's nonpayment." Id. at 121, 659 S.E.2d at 165-66 (emphasis added). We believe the superfluous use of the term "tort" here is the reason for the lingering confusion whether a violation of the SPPA will support a tort cause of action.
In this case, the court of appeals found that the Respondents could proceed against the City on a tort cause of action based on our conclusion that "the SPPA establishes both an affirmative duty on the governmental body to require payment bonding, as well as a standard of care for overseeing the issuance of a proper payment bond." The court of appeals held such language "clearly suggested a tort remedy for breach of the duty created pursuant to section 29-6-250 of the SPPA."
Both parties contend the court of appeals was correct in finding Respondents' cause of action for violation of the SPPA was a tort. The City argues a tort cause of action is governed by, and ultimately barred by, the TCA. Conversely, Respondents contend the court of appeals properly held the
The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature. Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000). "There is a presumption that the legislature has knowledge of previous legislation as well as of judicial decisions construing that legislation when later statutes are enacted concerning related subjects." McKnight, 352 S.C. at 648, 576 S.E.2d at 175. "It is presumed that the Legislature is familiar with prior legislation, and that if it intends to repeal existing laws it would ... expressly do so; hence, if by any fair or liberal construction two acts may be made to harmonize, no court is justified in deciding that the later repealed the first." Hodges, 341 S.C. at 88-89, 533 S.E.2d at 583.
We reject the suggestion that the legislature intended to provide a tort remedy under the SPPA. First, the text of the pertinent sections of the SPPA sounds in contract, not tort. Sloan I adopted the reasoning of A.E.I., which held the bonding requirement is incorporated into public works construction contracts and a subcontractor's claim sounded in common law as a claim for breach of contract. And this Court's definitive holding in Sloan I could not have been clearer: "For this reason, the government may be liable to a subcontractor for breach of contract for failing to comply with the SPPA bonding requirements." Sloan I, 377 S.C. at 120, 659 S.E.2d at 165.
Finally, it is true that Sloan I, in the section concerning relief, referenced a "tort or contract action arising under the SPPA...." However, we now clarify that no tort action arises under the SPPA. Therefore, we reverse the court of appeals with respect to its holding and find that the SPPA does not provide for a tort cause of action against a governmental entity.
The City next contends the court of appeals erred in reversing the circuit court's grant of summary judgment as to the claim of third-party beneficiary breach of contract. Specifically,
An unappealed ruling is the law of the case and requires affirmance. Transp. Ins. Co. & Flagstar Corp. v. S.C. Second Injury Fund, 389 S.C. 422, 432, 699 S.E.2d 687, 691 (2010). Certainly,
Weil v. Weil, 299 S.C. 84, 89, 382 S.E.2d 471, 473 (Ct.App. 1989) (quoting 21 C.J.S. Courts Section 195 at 335 (1940)). This State has a long-standing rule that one judge of the same court cannot overrule another. Charleston Cnty. Dep't of Soc. Servs. v. Father, 317 S.C. 283, 288, 454 S.E.2d 307, 310 (1995).
We find the orders of Judge John and Judge Short are not the law of the case insofar as the Amended Complaint is concerned. Neither Judge Short nor Judge John specifically ruled on the issue of whether Respondents pled a third-party beneficiary breach of contract claim. Moreover, the City's motions to strike did not require the trial court to determine whether a breach of contract action had been pled.
"Pleadings are to be liberally construed `to do substantial justice to all parties.'" Quality Towing, Inc. v.
We find Respondents' Amended Complaint pled a third-party beneficiary contract claim. In the "Facts" section of the Amended Complaint, Respondents allege they were "third-party beneficiaries" of the City's contract with Gilbert because the bonding requirements are "legislatively mandated contractual obligations" that were incorporated into the contract as a matter of law. The First Cause of Action incorporated the allegations within the "Facts" section and is entitled "Violation of S.C.Code Ann. section 29-6-250." While the word "contract" does not appear in the first cause of action, neither do the words "tort" or "negligence." A fair reading of the Amended Complaint leads to the reasonable conclusion that the first cause of action is one for breach of contract. Moreover, in light of our holding in section B, infra, the only claim that can be asserted under section 29-6-250 is a contract claim. Thus, we hold the Amended Complaint sufficiently put the City on notice that Respondents were proceeding on a third-party beneficiary claim theory.
Therefore, we affirm the court of appeals on the issues relating to Respondents' third-party beneficiary breach of contract claim.
The City also contends the court of appeals erred in reversing summary judgment as to Respondents' quantum meruit claim. We agree. Because there is no dispute as to the existence or validity of the underlying contract at issue, which is fundamentally at odds with the quasi-contractual theory of quantum meruit, we reverse the court of appeals' holding with respect to this claim. See Sloan I, 377 S.C. 108, 659 S.E.2d 158 (holding the SPPA's bonding requirements are
As a final matter, the City contends summary judgment should have been affirmed in any event because it has satisfied its obligation under the SPPA by paying the remaining balance on its contract with Gilbert to several of the unpaid subcontractors. Thus, the City argues no remand is necessary. We disagree.
Sloan I limits the City's liability to the remaining unpaid balance on the contract with Gilbert at the time the City received notice of Gilbert's nonpayment. 377 S.C. at 120, 659 S.E.2d at 165-66. The record is unclear as to the City's methodology of payment disbursement, and there are genuine issues of material fact regarding the date upon which the City learned of Gilbert's nonpayment, as well as the amount remaining unpaid at that time. Because factual questions are in dispute, summary resolution would be premature.
For the foregoing reasons, the court of appeals is affirmed in part and reversed in part, and this matter is remanded to the circuit court for resolution of the remaining issues consistent with this opinion.
TOAL, C.J., PLEICONES, BEATTY and HEARN, JJ., concur.