Sunland Construction Company, Incorporated v. Wilbur Smith, Incorporated

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-1642
SUNLAND CONSTRUCTION COMPANY, INCORPORATED,
Plaintiff – Appellee,
and
THE CITY OF MYRTLE BEACH,
Defendant – Appellee,
v.
WILBUR SMITH, INCORPORATED,
Defendant – Appellant,
and
COASTAL SCIENCE AND ENGINEERING, INCORPORATED; THOMAS E.
WHITE,
Defendants,
HARTFORD INSURANCE COMPANY,
Third Party Defendant.
Appeal from the United States District Court for the District of
South Carolina, at Florence. R. Bryan Harwell, District Judge.
(4:05-cv-01227-RBH)
Submitted: June 2, 2010 Decided: July 6, 2010
Before KING, DAVIS, and KEENAN, Circuit Judges.

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Affirmed by unpublished per curiam opinion.
Franklin J. Smith, Jr., David A. Anderson, Mason A. Summers,
RICHARDSON, PLOWDEN & ROBINSON, P.A., Columbia, South Carolina,
for Appellant. Michael W. Battle, BATTLE & VAUGHT, P.A.,
Conway, South Carolina; Lawrence C. Melton, NEXSEN PRUET, LLC,
Columbia, South Carolina, for Appellees.
Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Sunland Construction Company, Inc. (“Sunland”) filed
suit against the City of Myrtle Beach, South Carolina (the
“City”) alleging breach of contract after the City terminated
its contract with Sunland for the installation, by horizontal
direct drilling (“HDD”), of three 42-inch pipes to carry
rainwater under Myrtle Beach and approximately 1000 feet out to
sea. The termination of the contract was based on Sunland’s
failure or refusal to complete the project. Sunland sought
approximately $3 million in costs it allegedly incurred while
attempting to perform under the contract based on what it
alleged were defective specifications. Sunland also sued the
City’s design engineer, Wilbur Smith Associates (“WSA”), for
breach of its implied warranty of the suitability of the design
specifications.
The City counterclaimed against Sunland for breach of
contract, seeking to recover approximately $400,000 from Sunland
and/or its surety in excess re-procurement costs it incurred by
having the project completed by another contractor, using the
alternative, and less risky, “open trench” method. The City
also sued WSA for negligence and breach of contract.
Following an eight-day bench trial, the district court
concluded that Sunland could not recover against the City for
breach of contract because there was no meeting of the minds as

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to the allocation of risk for adverse subsurface conditions, and
that the City could not recover against Sunland for the same
reason. The court also found WSA was not liable to Sunland for
negligence; however, it found that WSA was liable to the City.
The ultimate finding of liability was based on the following
subsidiary findings: (1) WSA negligently recommended that the
contract be awarded to Sunland, inasmuch as; (2) Sunland’s bid
was dramatically lower than the other HDD bids; (3) WSA had not
adequately investigated Sunland’s bid prior to recommending it;
and (4) WSA, which was not independently qualified to render a
recommendation, had fired its HDD consultant prior to making its
recommendation to the City, a fact that WSA had withheld from
the City at the time it made its recommendation. The district
court awarded damages in the amount of $459,769.00 plus costs
and attorney’s fees in favor of the City against WSA, rejected
all other claims, and denied WSA’s motion for reconsideration.
Neither Sunland nor the City has appealed the district
court’s orders; however, WSA noted an appeal alleging that the
district court erred by:
(1) finding that WSA’s negligence was the proximate
cause of the City’s damages; and
(2) concluding that there was no meeting of the minds
between Sunland and the City regarding allocation of
the risks for adverse subsurface conditions.

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Following a trial, this court views the record in a
light most favorable to the party prevailing below. See Sec.
Exch. Comm’n v. Pirate Investor LLC, 580 F.3d 233, 237 n.2 (4th
Cir. 2009); ePlus Tech., Inc. v. Aboud, 313 F.3d 166, 171 n.1
(4th Cir. 2002). The court reviews a district court’s
conclusions of law de novo and its factual findings for clear
error. Roanoke Cement Co. v. Falk Corp., 413 F.3d 431, 433 (4th
Cir. 2005). “A finding is ‘clearly erroneous’ when although
there is evidence to support it, the reviewing court on the
entire evidence is left with the definite and firm conviction
that a mistake has been committed.” United States v. U.S.
Gypsum Co., 333 U.S. 364, 395 (1948); but see Fed. R. Civ. P.
52(a)(6) (due regard must be given “to the trial court’s
opportunity to judge the witnesses’ credibility”).
I. Proximate Cause
It is well settled that issues of negligence,
including proximate cause, “are generally treated as findings of
fact reviewable under Fed. R. Civ. P. 52(a).” See Bonds v.
Mortensen and Lange, 717 F.2d 123, 125 (4th Cir. 1983) (citing
Scheel v. Conboy, 551 F.2d 41, 43 (4th Cir. 1977); Lane v.
United States, 529 F.2d 175, 180 (4th Cir. 1975).
Under South Carolina law, “[p]roximate cause requires
proof of both causation in fact and legal cause.” See Mellen v.

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Lane, 377 S.C. 261, 278, 659 S.E. 2d 236 (Ct. App. 2008)
(citations omitted). “Causation in fact is proven by
establishing the plaintiff’s injury would not have occurred ‘but
for’ the defendant’s action,” whereas legal causation “is proved
by establishing foreseeability” of harm to the plaintiff. Id.
(citations omitted). WSA argues that its negligence was neither
the “cause in fact” nor the “legal” cause of the City’s
injuries. We address each contention in turn.
WSA argues that its negligence was not the “but for”
cause of the City’s injuries because, even in the absence of its
negligent recommendation that the contract be awarded to
Sunland, the City “may still have contracted with Sunland.” In
support of this contention, WSA points to the testimony of a
superintendent with the City’s Public Works Department, which,
WSA maintains, acknowledged that “even if the City had been
aware during the bid process that the HDD method carried more
risks that [sic] the trench method, the City may possibly have
still awarded the project to Sunland.” WSA also argues that the
City may have opened itself up to public criticism and lawsuits,
if the City had not selected Sunland, which had been the lowest
bidder for the project.
However, based on the entire record, when viewed in
the light most favorable to the City, we find that the district
court did not clearly err in finding that WSA was the cause in

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fact of the City’s injuries (i.e., that but for WSA’s
recommendation, the City would not have chosen Sunland). There
is substantial evidence to support the City’s contentions that
the City was not required to award the contract to the lowest
bidder and that it was persuaded to hire Sunland based on WSA’s
representations. Further, WSA has offered nothing more than
mere speculation concerning what the City “may possibly” have
done in its attempt to show that the district court clearly
erred on this point. When taken as a whole, the record does not
lead to the “definite and firm” conclusion “that a mistake has
been committed.”
Turning to WSA’s contention that it was not the legal
cause of the City’s injuries, we note that the South Carolina
Supreme Court has stated that while a plaintiff must establish
that the defendant reasonably could have foreseen that some
injury arising out his act or omission might occur, it is not
necessary for him to prove that the defendant should have
contemplated the particular event that ultimately occurred. See
J.T. Baggerly v. CSX Transp., Inc., 370 S.C. 362, 369-71, 635
S.E.2d 97 (2006). A plaintiff does not have to prove that the
defendant’s negligence was the sole proximate cause of his
injuries; he “merely has to show that it was foreseeable that
[the defendant’s] act (or omission) could cause, or be a
contributing cause to, appellant’s injury.” Id., 370 S.C. at

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371, 635 S.E.2d 97 (citing Whitlaw v. Kroger Co., 306 S.C. 51,
410 S.E.2d 251 (1991)). Thus, “it is sufficient if the evidence
establishes that the defendant’s negligence is ‘a concurring or
a contributing proximate cause.’” Id., 370 S.C. at 369, 635
S.E.2d 97 (citation omitted).
WSA argues that even if its negligence in the bidding
process set the stage for the City’s injuries, Sunland’s acts
were the sole proximate cause. We find this argument fails for
a number of reasons.
First, in a bidding process, where WSA was retained
specifically for its engineering expertise, it was reasonably
foreseeable that the City would enter into a contract with a
company based on WSA’s recommendation. Moreover, because the
company that WSA recommended bid the job at a dramatically lower
cost than any comparable bidders, and because WSA did not
investigate its bid, it was also foreseeable that the company
recommended could not or would not perform the promised services
for the promised fee. It follows, then, that it was a natural
and probable consequence of WSA’s negligence that the City would
be forced to pay more to find cover in the re-procurement
market.
Moreover, even to the extent Sunland’s conduct
contributed to the City’s injuries, this fact alone does not
sever WSA’s liability for its initial negligence, which set into

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motion all of the events that ultimately, and foreseeably, lead
to the City’s harm. Cf. Mellon, 377 S.C. at 281, 659 S.E.2d 236
(“if the acts of the intervening agency are a probable
consequence of the primary wrongdoer’s actions, i.e.,
‘foreseeable,’ the primary wrongdoer is liable”). This is
because there was no “break[] [in] the sequence or causal
connection between the [WSA’s] negligence and the injury
alleged.” Id. (citing Matthews v. Porter, 239 S.C. 620, 628,
124 S.E.2d 321, 325 (1962)).
In short, it is clear that WSA’s conduct was a
“substantial factor in the harm to [the City],” and the mere
fact that WSA “neither foresaw nor should have foreseen the
extent of the harm or manner in which it occurred does not
negative [its] liability.” See J.T. Baggerly, 370 S.C. at 369,
635 S.E.2d 97. Thus, because the harm was foreseeable, the
district court did not clearly err in determining that WSA’s
acts or omissions were the legal cause of the City’s injuries.
II. Contract Claims Between Sunland and the City
As for WSA’s contention that the district court
clearly erred in determining that there was no meeting of the
minds, and thus no binding contract between the City and
Sunland, both the City and Sunland argue, inter alia, that WSA
lacks standing to contest this finding. We agree that WSA, as a

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stranger to the ostensible contract between Sunland and the
City, lacks standing. See R.J. Griffin & Co. v. Beach Club II
Homeowners Ass'n, 384 F.3d 157, 164 (4th Cir. 2004) (“Generally,
a third person not in privity of contract with the contracting
parties has no right to enforce a contract.” (applying South
Carolina law) (citation omitted)). In essence, WSA asserts it
has standing on the altogether tenuous ground that it was
“aggrieved” by the finding of a lack of mutual assent, implying
that the district court was essentially left with no choice but
to impose liability on it (rather than on Sunland) for the
City’s excess costs. This contention lacks merit.
In any event, as stated above, South Carolina law
recognizes that liability may attach when there are multiple
concurring or contributing proximate causes, and WSA has failed
to point to any case or authority that states, or even suggests
that this legal principle is inapplicable based on whether or
not a contract was formed or contractual claims are involved.
Notably, WSA declined to assert indemnity or contribution claims
against Sunland to avoid or lessen its potential liability to
the City for its failure to exercise reasonable care in
recommending which bid the City should accept. It may not
belatedly insert such a claim into the case by challenging the
district court’s factual findings in respect to an alleged
contract to which it was never a party.

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* * * * *
We accordingly affirm the district court’s judgment.
We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
AFFIRMED

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