Terlizzi Home Improvement v. Boheler

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Terlizzi Home Improvement, LLC, Appellant,

v.

Michael L. Boheler, Jeannette A. Boheler and the
Palmetto Bank as Assignee of Midlands Mortgage Corp.,
Defendants,

Of Whom Michael L. Boheler and Jeannette A. Boheler
are the Respondents,

v.

William Terlizzi, Third-Party Defendant and Appellant.

Appellate Case No. 2014-002540

Appeal From Newberry County
Frank R. Addy, Jr., Circuit Court Judge

Unpublished Opinion No. 2017-UP-280
Heard April 18, 2017 – Filed July 5, 2017

AFFIRMED IN PART, REVERSED IN PART,
VACATED IN PART, AND REMANDED

Robert Merrel Cook, II, of The Robert Cook Law Firm,
LLC, of Leesville, for Appellants.
Charles A. Krawczyk and Kathleen McDavid Muthig,
both of Finkel Law Firm, LLC, of Columbia, for
Respondents.

PER CURIAM: Terlizzi Home Improvement, LLC (THI) and William Terlizzi
(collectively, Appellants) appeal the circuit court's order granting partial summary
judgment to Michael L. Boheler and Jeannette A. Boheler (collectively,
Respondents) and discharging Appellants' mechanic's lien over Respondents'
property on the ground that Appellants willfully and knowingly inflated the
amount due. On appeal, Appellants argue the circuit court erred by (1) discharging
the mechanic's lien because (a) the amount of the lien was reduced before the
motion for summary judgment was filed; (b) the circuit court applied an incorrect
evidentiary standard for the summary judgment motion; and (c) evidentiary
disputes precluded summary judgment; (2) awarding attorney's fees against
Terlizzi personally because he was not a named party to the action and THI
shielded him from liability; and (3) awarding an unreasonable amount of attorney's
fees. We affirm in part, reverse in part, vacate in part, and remand.

1. First, we find the circuit court did not err in granting partial summary judgment
and discharging the mechanic's lien. Rule 56(c), SCRCP, provides a motion for
summary judgment shall be granted "if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law." "An appellate court reviews the
granting of summary judgment under the same standard applied by the [circuit]
court pursuant to Rule 56, SCRCP." Ferguson Fire & Fabrication, Inc. v.
Preferred Fire Prot., L.L.C., 409 S.C. 331, 339, 762 S.E.2d 561, 565 (2014)
(quoting Progressive Max Ins. Co. v. Floating Caps, Inc., 405 S.C. 35, 42, 747
S.E.2d 178, 182 (2013)). The applicable statutory basis for a mechanic's lien is a
debt due "for labor performed or furnished or for materials furnished and actually
used in the erection, alteration, or repair of a building or structure upon real estate."
S.C. Code Ann. § 29-5-10(a) (2007) (emphasis added). Notwithstanding the
court's inherent power to discharge a wrongfully filed lien, a court has four
statutory bases by which it may discharge a mechanic's lien. See Sea Pines Co. v.
Kiawah Island Co., 268 S.C. 153, 156–57, 232 S.E.2d 501, 502 (1977). The
statutory basis for the discharge at issue here allows for discharging a mechanic's
lien if "it appear[s] that the person filing the certificate has wil[l]fully and
knowingly claimed more than is his due." S.C. Code Ann. § 29-5-100 (2007).
Appellants offered no rational basis for filing a lien against Respondents in the
amount of $106,001.13. During Terlizzi's deposition, he admitted he did not use
the actual costs of materials and labor involved in the construction of Respondents'
home to calculate the sum of the lien. Instead, Terlizzi repeatedly testified he
estimated and reengineered the costs. In fact, Terlizzi conceded he could only
account for actual costs amounting to $48,719.23. Additionally, in calculating the
money owed for the lien, Terlizzi admitted he included the value of work for which
he previously signed lien waivers he knew to be valid. Considering the
overwhelming evidence in the record that Appellants willfully and knowingly
inflated the lien, we find no error in the circuit court granting partial summary
judgment to Respondents and discharging the lien.

Appellants attempt to circumvent the issue by citing to their stipulation to reduce
the lien prior to Respondents' motion for partial summary judgment. We find this
argument to be without merit. Although Appellants filed a stipulation to reduce
the lien three months prior to Respondents filing their motion for partial summary
judgment, the reduced lien was filed two years after the initial lien. During those
two years, Respondents were forced to raise $143,000 in bond for the mechanic's
lien by liquidating their 401k plans, drawing their social security early, and taking
out a personal loan, all while facing two years of protracted litigation as discovery
progressed. A lien holder cannot be allowed to grossly inflate the amount of a
mechanic's lien, hold a property owner hostage in litigation for two years, and
subsequently avoid dismissal pursuant to section 29-5-100 simply by later
stipulating to a reduced lien amount. Accordingly, we find the circuit court did not
err in discharging the mechanic's lien.

2. The controlling statutes provide Respondents are entitled to attorney's fees for
successfully defending against the mechanic's lien. See § 29-5-10(a) ("The costs
which may arise in enforcing or defending against the lien under this chapter,
including a reasonable attorney's fee, may be recovered by the prevailing party.");
S.C. Code Ann. § 29-5-20(A) (2007) ("If the party defending against the lien
prevails, the defending party must be awarded costs of the action and a reasonable
attorney's fee as determined by the court. The fee and the court costs may not
exceed the amount of the lien.").1 Additionally, this court has specifically noted

1
This court has previously interpreted "may" to mean "shall" for this section. See
T.W. Morton Builders, Inc. v. von Buedingen, 316 S.C. 388, 403, 450 S.E.2d 87, 95
(Ct. App. 1994) (per curiam) ("We therefore hold that in order to protect the
private interest of contractors . . . 'may' as used in [s]ection 29-5-10 should be
that the failure to request attorney's fees does not bar the award or prejudice the
lien holder "because [the lien holder] ha[s] notice of the potential for an award of
attorney['s] fees given the mandatory language of the mechanic's lien statutes."
Utils. Constr. Co. v. Wilson, 321 S.C. 244, 247, 468 S.E.2d 1, 2 (Ct. App. 1996).
Undoubtedly, Respondents are due the statutorily mandated attorney's fees, and
THI is liable for those fees. However, the record is unclear as to whether Terlizzi
is personally liable for the fees as the circuit court held.

THI filed the mechanic's lien against Respondents and subsequently attempted to
foreclose upon it. Terlizzi, in his individual capacity, was not a party to THI's
mechanic's lien or foreclosure complaint. He was only made a third-party
defendant to Respondents' tort and contract counterclaims, which have yet to be
decided. Given that Terlizzi specifically denies any wrongdoing as to
Respondents' claims, we find an award of attorney's fees against Terlizzi is
premature at this time. Therefore, we vacate the circuit court's award of attorney's
fees as to Terlizzi personally and remand for further proceedings.

3. Last, we find the circuit court abused its discretion by awarding attorney's fees
for work done outside the scope of defending against the mechanic's lien. See
Keeney's Metal Roofing, Inc. v. Palmieri, 345 S.C. 550, 553, 548 S.E.2d 900, 901
(Ct. App. 2001) ("The determination as to the amount of attorney's fees that should
be awarded under the mechanic's lien statute is addressed to the sound discretion of
the [circuit] court.").

"As a general rule, attorney's fees are not recoverable unless authorized by contract
or statute." Id. at 553–54, 548 S.E.2d at 902. Here, the authorizing statutes allow
attorney's fees "which may arise in enforcing or defending against the lien." S.C.
Code Ann. § 29-5-10(a) (emphasis added). Accordingly, attorney's fees are
available for only those fees incurred by Respondents in defending against the lien.
See Utils. Constr. Co., 321 S.C. at 250, 468 S.E.2d at 4 (finding the circuit court
abused its discretion by awarding attorney's fees for defending against breach of
contract and unjust enrichment causes of action included in the mechanic's lien
foreclosure action).

"When determining the reasonableness of attorney's fees under a statute mandating
the award of attorney['s] fees, the contract between the client and his counsel does

interpreted to mean that costs, to include a reasonable attorney's fee shall be
secured by the mechanic lien, as is the case in [s]ection 29-5-20." (emphasis
added)).
not control the determination of a reasonable hourly rate." Jackson v. Speed, 326
S.C. 289, 308, 486 S.E.2d 750, 759 (1997). Instead, the court should consider the
following six factors when determining reasonable attorney's fees: "(1) the nature,
extent, and difficulty of the case; (2) the time necessarily devoted to the case; (3)
professional standing of counsel; (4) contingency of compensation; (5) beneficial
results obtained; and (6) customary legal fees for similar services." Id. at 308, 486
S.E.2d at 760. "Further, on appeal, an award for attorney's fees will be affirmed so
long as sufficient evidence in the record supports each factor." Id. "[A]bsent
sufficient evidentiary support on the record for each factor, the award should be
reversed and the issue remanded for the [circuit] court to make specific findings of
fact." Blumberg v. Nealco, Inc., 310 S.C. 492, 494, 427 S.E.2d 659, 661 (1993).

Respondents' counsel filed an affidavit of attorney's fees, which included charges
outside the scope of defending against the mechanic's lien and also charges lacking
sufficient evidence that they were within the scope of defending against the
mechanic's lien. Additionally, the circuit court did not include specific findings of
fact regarding the reasonableness of the fees. Many fees outlined in the affidavit
indicate work on multiple projects associated with the overall litigation, and some
may have included work in defense of the mechanic's lien. However, the affidavit
is unclear in many respects, and because the circuit court did not include specific
findings regarding these fees, determining its accuracy on review with a limited
record is impossible. Accordingly, we reverse and remand this issue to the circuit
court to exclude fees outside the scope of defending against the mechanic's lien and
make specific findings of fact regarding the reasonableness of the attorney's fees.

In conclusion, we affirm the circuit court's decision to discharge the mechanic's
lien. We affirm the circuit court's award of attorney's fees against THI. However,
because Terlizzi, in his individual capacity, was not a party to the THI's mechanic's
lien or foreclosure complaint, we vacate the circuit court's award of attorney's fees
as to Terlizzi personally and remand for further proceedings. Last, we reverse the
portion of the circuit court's order that includes attorney's fees outside the scope of
defending against the mechanic's lien and remand this issue to the circuit court for
a determination of the appropriate amount of attorney's fees.

Based on the foregoing, the circuit court's decision is

AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART, and
REMANDED.

WILLIAMS and KONDUROS, JJ., and LEE, A.J., concur.