May 25, 2017
Perhaps you forgot about it, or maybe you just gave up on it; regardless, you will be happy to hear that the Right to Cure Act just may be alive.
In an Order dismissing Plaintiffs’ claims, entered in the Charleston County Court of Common Pleas, former South Carolina Supreme Court Chief Justice Jean Hoefer Toal, breathed new life into the Act. Sitting as the Presiding Judge, Justice Toal, granted the general contractor’s Motion to Dismiss in the matter of McIntire v. Seaquest Development Company, et al, Case No.: 2016-CP-10-1833; Order entered May 1, 2017.
In August, 2007, the McIntires entered into a written contract with Seaquest, as the general contractor, for the construction of a home. The work was performed by multiple subcontractors, most of whom were defendants or third party defendants in the law suit.
In April, 2016, the McIntires filed suit asserting various causes of action including Negligence, Breach of Warranty of Habitability, Negligent Misrepresentation and Constructive Fraud, and Breach of Warranty of Good and Workmanlike Product. All causes of action arose from a number of alleged construction defects discovered by the McIntires. The McIntires substantially completed the repairs of the alleged construction defects without affording Seaquest an opportunity to cure. Based thereon, Seaquest moved to dismiss the entire action on the grounds that the McIntires failed to comply with the requirements of the South Carolina Notice and Opportunity to Cure Construction Dwelling Defects Act, S.C. Code Ann.§40-59-810-860 (the “Right to Cure Act” or “the Act”), by substantially completing the repairs to the property prior to filing suit.
The Right to Cure Act requires a claimant to serve, by means of personal service, or by certified mail to the last known address of the addressee, written notice of claim on the contractor, containing certain required information about the claim. This notice must be served no less than ninety days before filing an action arising out of the construction of a dwelling, as defined by the Act. There is a prescribed method by which the contractor may advise the claimant if the construction defect is not sufficiently stated, and request clarification thereof. The Act includes a mandatory pre-suit inspection/opportunity to cure procedure and the related rights or obligations of the respective parties. The Act, which applies to both contractors and subcontractors, further provides that if a claimant files an action in court before first complying with the requirements of the Act, upon motion of a party to the action, the court shall stay the action until such time as the claimant has complied with the requirements. (emphasis added). When, as here, the claimant has substantially completed the repairs before notice to the contractor, the alleged defects are destroyed without giving the contractor an opportunity to inspect or cure them. Consequently, compliance with the Act is impossible, as is pursuit of the contractor’s rights thereunder. The Act clearly requires a stay in the event a claimant fails to comply, and where, as here, there is no possibility of compliance, the stay must be permanent which is equivalent to a dismissal. (Co-Defendant Red Bay Constructors Corp. likewise filed a Motion to Dismiss or for Stay of Proceedings. The Court found that as a result of the dismissal of the case against Seaquest, Red Bay’s motion is moot, and the entire case is dismissed.)
So, for all who have decided the Act is without impact, Judge Toal’s Order renews hope. While this Order is in the Court of Common Pleas and therefore not binding authority, it is an extremely well-reasoned opinion, referencing the Supreme Court’s earlier analysis of the legislative intent underlying the Act. In Grazia v. South Carolina State Plastering, LLC, 3909 S.C. 562, 703 S.E.2d 197 (S.C. 2010) the Court stated that the Act has an express public policy intent of addressing the need for an alternative dispute resolution approach to promote settlement of construction claims without litigation, while also protecting the rights of claimants. The Court concluded the public policy of the Act is not abridged when a court, upon motion of a party, is required to stay a proceeding in order to require compliance with the Act’s notice provisions.
Cheryl D. Shoun is a trial attorney and certified mediator whose experience includes construction law, insurance defense, personal injury defense, employment litigation and medical malpractice.