Boykin Contracting, Inc. v. Kirby

Citations: 405 S.C. 631; 748 S.E.2d 795Docket: Appellate Case No. 2012-209067; No. 5133

Court: Court of Appeals of South Carolina; May 15, 2013; South Carolina; State Appellate Court

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Wayne Kirby, operating as Carolina Gold Bingo, appeals a circuit court decision that awarded Boykin Contracting, Inc. (BCI) $59,494.31 plus prejudgment interest for electrical work at a bingo establishment in Columbia, South Carolina. Kirby argues that BCI did not establish the necessary elements of quantum meruit, seeking to reverse the decision in favor of Kirby. The circuit court’s ruling is affirmed.

BCI, a licensed contracting firm, and Kirby, president of Kirby Enterprises, entered into a relationship in the context of a bingo operation. In 2007, negotiations began for a bingo parlor under New Covenant Church, leading to Kirby signing a lease in 2008 for space in a former Winn-Dixie building. The lease identified Kirby as the tenant, and an initial contract was made with Hemphill Associates, Inc. for renovations, including $25,000 for electrical work. However, the project stalled when Hemphill halted work due to insufficient funds in November 2007.

In April 2008, BCI's vice-president Tom Brock contacted Kirby to offer assistance with the electrical work. Brock and Kirby disagreed on the terms of BCI’s engagement; Kirby believed BCI would work under the existing electrical contractor, while Brock asserted BCI would operate independently. BCI commenced work the following day, completing several electrical tasks and allowing Kirby to secure a certificate of occupancy by June 4, 2008.

BCI invoiced Kirby for $73,925.40 on July 31, 2008, but received no payment. Consequently, BCI filed a mechanic’s lien on October 27, 2008, and initiated a lawsuit on January 12, 2009, to enforce the lien.

Following a one-day bench trial, the circuit court ruled on December 30, 2011, that there was no enforceable contract due to a lack of a meeting of the minds between the parties. Nonetheless, it determined that BCI could recover the reasonable value of its labor and materials under a quantum meruit claim, awarding Boykin $59,494.31, along with prejudgment interest and costs of $160. Kirby's subsequent motion for reconsideration was denied, leading to this appeal.

The appeal raises two key issues: (1) whether the circuit court erred in allowing BCI to recover from Kirby on the quantum meruit claim, and (2) whether the awarded damages of $59,494.31 plus prejudgment interest were appropriate. Quantum meruit, akin to quasi-contract or implied by law contract, serves as an equitable remedy, and appellate courts review such cases based on the preponderance of the evidence.

Kirby argues that the circuit court incorrectly found that BCI conferred a benefit to him personally, rather than to Carolina Gold Bingo or Kirby Enterprises. The court identified three elements necessary for a quantum meruit claim: a benefit conferred, realization of that benefit, and unjust retention of that benefit without payment. The circuit court concluded that BCI conferred a benefit on Kirby individually, noting that he exercised control over the bingo operations before signing the lease and was recognized as the “owner” on relevant documents. Although Kirby contested the significance of these designations, the court maintained that they supported the conclusion that he was the intended beneficiary of BCI’s work. Additionally, Kirby’s active involvement in directing the project and managing its operations reinforced the court’s determination that he personally benefited from BCI's services. The court found Kirby's defense unpersuasive, emphasizing his direct stake in the project’s success.

Kirby Enterprises' corporate veil did not need to be pierced for the circuit court to hold Kirby personally liable, as BCI did not pursue claims against the enterprise under that theory. Instead, Kirby raised the corporate veil as a defense against his individual liability. Kirby's argument that he did not benefit from Carolina Gold Bingo's operations was rejected, supported by the 2008 leasehold agreement where he was listed as the tenant. Evidence showed Kirby hired a contractor and provided necessary resources for the bingo parlor's establishment, indicating he personally benefitted from BCI’s work. As Kirby did not compensate BCI for the electrical work, he was deemed unjustly enriched, allowing BCI to recover under quantum meruit.

Regarding damages, the court found no error in the damages award or in allowing BCI to recover prejudgment interest. In cases where a contract fails due to lack of agreement on essential terms, recovery can still be made for the reasonable value of services under a quasi-contractual theory. Quantum meruit serves as an equitable remedy to prevent unjust enrichment, allowing recovery equivalent to the benefits received by the defendant at the plaintiff's expense. The measure of damages in an unjust enrichment claim is based on the increase in the fair market value of the property due to the plaintiff's improvements.

Kirby challenges the circuit court's calculation of BCI's damages, arguing that it should have been based on the value received from BCI's work rather than the reasonable value of BCI's labor and materials. The court finds that the appropriate measure of recovery is tied to the unjust enrichment of the defendant, which in this case corresponds to Boykin’s costs in completing the project. 

The court distinguishes this case from Stringer Oil, where the damages were unliquidated and based on an expectation of future purchases rather than a quid pro quo agreement. In this instance, BCI's claims are liquidated due to a contractual agreement for payment in exchange for work performed. Consequently, the court defers to the circuit court’s damage calculation, which awarded BCI $59,494.31 after reviewing BCI’s job cost analysis and invoices. The court deducted a 15% profit margin and unproven credit card charges from the total owed.

Kirby also contests the award of prejudgment interest, asserting it was improperly granted. The court disagrees, stating that prejudgment interest is permissible on demandable, certain sums, even if disputed. It affirms that the circuit court has discretion to award such interest in quantum meruit claims, provided the recovery measure is established at the time the claim arose.

The circuit court properly awarded prejudgment interest to BCI, as the owed amount could be quantified. The recovery measure was established by BCI's invoices at the time their claim against Kirby arose. Disagreement over the owed amount did not prevent the award of prejudgment interest. The court’s decision was affirmed.

BCI invoiced Carolina Gold Bingo, the trade name used by Kirby for the bingo operation, and the circuit court deducted a 15% profit margin and $2,760.29 in unverified credit card charges from BCI's claim. Kirby was identified as the tenant on both the 2007 and 2008 leases, with the 2007 lease covering the whole building and the 2008 lease solely for the bingo parlor. Kirby's name and details were present in the 2007 lease, and he acknowledged being listed as a tenant. His claim that the trade name used was incorrect was dismissed as disingenuous since the 2008 lease explicitly identified him as “Wayne Kirby d.b.a. Carolina Gold Bingo.”

Kirby contested the calculation of damages based on BCI's labor and materials. Although BCI's invoice listed costs as $55,509.46 and a job cost analysis indicated $62,254.60, the circuit court based its award on the job cost total. The award was deemed appropriate, as it fell within the range of evidence presented during the trial.