Builders FirstSource-Southeast Group, LLC v. Palmetto Trim and Renovation

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

The Retreat at Charleston National Country Club Home
Owners Association, Inc., and The Retreat at Charleston
National Country Club Horizontal Property Regime,
Plaintiffs,

v.

Winston Carlyle Charleston National, LLC; Colin R.
Campbell Construction, Inc.; Colin Campbell,
individually; Builders FirstSource-Southeast Group,
LLC; Builders FirstSource, Inc.; Americo Roofing
Concepts, Inc.; DVS, Inc.; Advanced Building
Connection, LLC; Guy C. Lee Building Materials, LLC;
WS Contractors, LLC; Dino Schwartz, Individually;
Charleston Exteriors, LLC; ECC Contracting, LLC;
Hurley Services, LLC; McDaniel Construction Co., LLC;
AC Construction Corp.; AC Construction, Inc.; L&G
Construction Group, LLC; Liollio Architecture; JC
Contractors, LLC; Soto & Vasquez Construction, LLC;
Costa De Oliveira Construction, LLC; Solesmar Jesus De
Oliveira; Wilson Lucas Sales d/b/a Miracle Siding;
Miracle Siding, LLC; Royal Homes of SC, Inc.; Collen
Batissa; Christopher Batissa; Norma Ferreira Bruno;
Mendez Construction, LLC; Juan Garza Ramos,
individually; Juan Garza Ramos d/b/a Juan Constructors;
Jessica Marroquin, individually; Jessica Marroquin d/b/a
Marroquin Construction; Carlos Marroquin, individually;
Carlos Marroquin Construction; Carlos and Jessica
Marroquin d/b/a Marroquin Construction; Feliciano Cruz
Silva; Garcia Roofing, LLC; Givair De Caris; and Mario
Salgado; Defendants,

Builders FirstSource-Southeast Group, LLC, Third-Party
Plaintiff, Appellant,

v.
Pohlman Quality Contractors; Pohlman Quality
Exteriors; Palmetto Trim and Renovation; Edward Bruce
Witham; and East Coast Carpentry, Third-Party
Defendants,

Of which Palmetto Trim and Renovation; Hurley
Services, LLC; ECC Contracting, LLC; East Coast
Carpentry; AC Construction, Inc.; WS Contractors, LLC;
Pohlman Quality Exteriors, Inc.; and L&G Construction
Group, LLC are the Respondents.

Appellate Case No. 2021-001050

Appeal From Charleston County
Jennifer B. McCoy, Circuit Court Judge

Opinion No. 6099
Heard March 5, 2024 – Filed February 12, 2025

AFFIRMED

Stephen P. Hughes and William Hewitt Cox, III, both of
Howell Gibson & Hughes, PA, of Beaufort, for
Appellant.

Thomas Frank Dougall, of Dougall & Collins, of Elgin,
and Michal Kalwajtys, of Baker Ravenel & Bender, LLP,
of Columbia, both for Respondent L&G Construction
Group, LLC.

Edward Glenn Elliott, of Aiken Bridges Elliott Tyler &
Saleeby, P.A., of Florence, for Respondent Pohlman
Quality Exteriors, Inc.
W. McElhaney White and Todd Russell Flippin, of
Holcombe Bomar, PA, of Spartanburg, for Respondent
Hurley Services, LLC.

Kevin W. Mims, John Barnwell Fishburne, Jr., and
William Chase McNair, all of Luzuriaga Mims, LLP, of
Charleston, for Respondent AC Construction Inc.

Payton Dwight Hoover and James H. Elliott, Jr., both of
Richardson Plowden & Robinson, PA, of Mount
Pleasant, for Respondent Palmetto Trim and Renovation.

Francis Heyward Grimball and James H. Elliott, Jr., both
of Richardson Plowden & Robinson, PA; Mark Shanter
Chaparro, of Hall Booth Smith, PC; and L. Dean Best, of
Best Law, P.A., all of Mt. Pleasant, for Respondent ECC
Contracting, LLC.

Francis Heyward Grimball and James H. Elliott, Jr., both
of Richardson Plowden & Robinson, PA, of Mt. Pleasant,
for Respondent East Coast Carpentry.

John Phillips Linton, Jr. and Jennifer Sue Ivey, both of
Walker Gressette & Linton, LLC, of Charleston, for
Respondent WS Contractors, LLC.

MCDONALD, J.: Builders FirstSource-Southeast Group, LLC (BFS) appeals
eight orders granting summary judgment or partial summary judgment to various
subcontractors. BFS argues the circuit court erred in (1) applying the clear and
unequivocal standard of Concord & Cumberland Horizontal Property Regime v.
Concord & Cumberland, LLC, 424 S.C. 639, 819 S.E.2d 166 (Ct. App. 2018); (2)
finding the indemnity provisions of BFS's subcontracts violate South Carolina law
and public policy; (3) finding BFS's indemnity claims are collaterally estopped; (4)
failing to address severability or finding the court lacked authority to sever; and (5)
deeming the subcontracts unconscionable and unenforceable. We affirm all eight
orders.
Facts and Procedural History

This appeal stems from complex construction defect litigation filed by The Retreat
at Charleston National Country Club Home Owners Association, Inc. and The
Retreat at Charleston National Country Club Horizontal Property Regime
(collectively, Plaintiffs). In this underlying case, Plaintiffs sought damages for
deficiencies in the original construction of a multi-family development consisting
of thirty-two buildings containing 129 townhome units (the Project). According to
Plaintiffs' fourth amended complaint, BFS "provided materials and/or labor,
including but not limited to the framing, the windows and doors and all related
components at all or a portion of the Project."1

Plaintiffs claimed, among other things, that BFS's framing and window installation
services were deficient and that these deficiencies resulted in water intrusion and
corresponding damages. Plaintiffs' forensic expert opined the windows had
inadequate design pressure (DP) ratings;2 BFS used fasteners of an improper type
and inadequate length to assure the embedment of fasteners into the framing; and
BFS installed the fasteners at spacing intervals exceeding those required by the
manufacturer's installation criteria.

BFS contracted with several subcontractors for work on the Project. After
litigation began, BFS filed crossclaims or third-party claims against many of its
subcontractors, asserting causes of action for negligence, breach of express and
implied warranty, breach of contract, and contractual or equitable indemnity.

Respondents filed motions for summary judgment and supporting memoranda
throughout 2019 and 2020. In May 2021, the circuit court issued Form 4 orders
granting, or granting in part, summary judgment to Palmetto Trim and Renovation
(Palmetto), Hurley Services, LLC (Hurley), ECC Contracting, LLC (ECC), East
Coast Carpentry (East Coast), AC Construction, Inc. (ACC), WS Contractors, LLC

1
BFS holds an unlimited commercial general contractor's license. The circuit
court found it "is undisputed that BFS furnished the framing lumber, housewrap,
windows, doors, related flashings, and caulk" as well as "superintendents to
oversee and inspect the installation of such materials for construction of the Project
on Buildings 5-21, 2200, 2300, 2500, 2600, 2700, 2800, and 2900."
2
DP ratings address the pressure a window can withstand without failing.
(WSC), and Pohlman Quality Exteriors, Inc. (Pohlman). 3 Formal orders followed,
and the circuit court denied BFS's motions to reconsider.4 BFS timely filed eight
separate notices of appeal. Over BFS's objection, this court consolidated these
eight appeals.

Standard of Review

"Rule 56(c) of the South Carolina Rules of Civil Procedure provides that the
moving party is entitled to summary judgment 'if the [evidence before the court]
show[s] 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.'" Kitchen Planners, LLC v.
Friedman, 440 S.C. 456, 459, 892 S.E.2d 297, 297 (2023) (alterations by the court)
(quoting Rule 56(c), SCRCP).

Analysis

Among the orders before us, two different versions of BFS's master subcontract are
at issue. Two orders address the 2005 version of BFS's master subcontract (the

3
"Palmetto served as a subcontractor of BFS and in that capacity performed
window installation work on Units 500, 700 and 1000." "Hurley was a labor-only
subcontractor to BFS . . . . BFS sold and provided for installation windows, doors,
weather-resistant materials, and other building components for some of the
buildings." "ECC served as a subcontractor of BFS and in that capacity performed
deck repair work on Unit 2001, and installed windows and doors on Units A1 &
A2." No deficiencies have been documented by Plaintiffs at Unit 2001. "East
Coast served as a subcontractor of BFS and in that capacity performed window
installation on Buildings 6, 8, 9, 12, 13, 14, 16, 17, 18." ACC "served as a
subcontractor of BFS and in that capacity performed framing services on Buildings
5 through 22. [ACC] did not perform any other work on the Project." "WSC
served as a subcontractor of BFS and performed work on Buildings 22 through 31
at the Project that were constructed between 2012 and late 2014. WSC did not
perform any work on other buildings at the Project." Pohlman was a labor-only
contractor on Buildings 11 and 21; BFS supplied building materials, including
windows and window fasteners, for Pohlman's use.
4
The circuit court also granted L&G Construction's motion to join in ECC and
WSC's motions for partial summary judgment. In this order, the circuit court
explains, "BFS supplied all materials and hired several subcontractors to perform
its scope of work. L&G, a residential framer, was one of those subcontractors."
2005 Contracts); the other six involve a later version of this master agreement (the
Later Contracts).

The 2005 Contracts govern BFS's relationships with Palmetto and East Coast
(collectively, the 2005 Subcontractors). These contracts contain the following
relevant clauses, including the indemnification language of Section 6(b)(2):

SECTION 1. Introduction.

Work. This Agreement contains the basic terms and conditions under
which Subcontractor agrees to provide materials and/or to perform
services (the "Work") from time to time for Contractor on any project
(the "Project"). TIME IS OF THE ESSENCE. . . . In accordance
with the terms and conditions contained in this Agreement,
Subcontractor will perform and finish in a good and workmanlike
manner, and will furnish all required materials, labor, equipment,
supplies and tools for, the Work described from time to time for
Contractor on any Project. The Work will be performed in
accordance with plans, specifications, drawings and schedules for the
Work, and any supplemental terms and conditions to this Agreement,
all of which are, or will be, on file at the office of the Contractor
("Contract Documents") and incorporated into the Agreement by this
reference as if fully set forth. Contractor will have the right at any
time to supplement the plans and specifications for the Work with
additional or replacement drawings and schedules or other documents
and upon so doing such drawings and schedules will immediately
become part of the Contract Documents. The Contract Documents,
including any time schedules, may be amended and/or supplemented
from time to time by giving Subcontractor written notice thereof.
Subcontractor's only remedy in the event an amendment or
supplement to the Contractor Documents materially increases the cost
or difficulty of performance by the Subcontractor is to terminate this
Agreement by written notice to Contractor within 24 hours after
Contractor delivers such amendment or supplement to Subcontractor.

....

SECTION 2. Materials and Workmanship. Subcontractor agrees to
commence Work on Projects upon request by Contractor.
Subcontractor agrees to provide all labor, services, equipment, and
tools necessary to complete the Work.

....

c. Protection of Work. Subcontractor shall bear all risk of loss or
damage to the Work resulting from any cause whatsoever until
Subcontractor has completed its Work on the Project and such work
has been accepted by Contractor and Owner. Subcontractor shall at
all times, and at its expense, protect all of its labor, materials
(regardless of who supplied such materials), supplies, tools, and
equipment (and those of its employees, agents, and subcontractors)
against any damage, injury, destruction, theft, or loss. Subcontractor
shall, at its expense, promptly repair or replace damage to the Work or
damage to any other components of the Project resulting from the
activities of Subcontractor or its employees, agents, or subcontractors.

....

SECTION 3. Warranty and Service. All Work shall be
unconditionally guaranteed by Subcontractor for a period of two
years, or such longer period as may be required by law or for which
Owner requires Contractor to warrant such Work, from the date
following Owner's acceptance of the Work. Subcontractor shall
correct at its own expense all defects that appear during such period,
and all damage (whether to the Work or other components of the
Project) arising out of, caused by or in any way related to said defects
or repair, within twenty-four (24) hours after written notice or within
the time agreed to in writing by Contractor (Saturdays and Sundays
excluded). The determination as to what constitutes a defect will be
within the sole discretion of Contractor and Owner. If Subcontractor
fails to promptly commence and complete the correction of defects,
Contractor or Owner may do so. In such event, Subcontractor shall
promptly reimburse Contractor for the cost of such work, plus a sum
of fifteen percent (15%) thereof (for supervision and overhead).
Contractor may, at its option, elect to charge such amounts against the
next Partial Payment (defined in Section 8) or the final payment.
Subcontractor will maintain a published phone number or an
answering service during normal working hours.
....

SECTION 6. Waiver, Release, and Indemnification.
Subcontractor agrees that Subcontractor, and not Contractor, shall be
responsible for all injuries, losses, or damages to Subcontractor, its
employees, agents, and subcontractors and to any other parties
arising from or relating in any way to the performance of the Work or
the actions or inactions of Subcontractor or its agents, employees, and
subcontractors. Subcontractor will indemnify, defend and hold
Contractor harmless against any such injuries and claims.
Accordingly:

....

b. Release and Indemnity.

(1) Subcontractor hereby agrees to release, indemnify, defend, and
hold harmless Contractor and Owner and their affiliates and
employees, directors, officers, agents, and invitees (each an
"Indemnitee''), to the fullest extent permitted by law from any
costs, expenses, demands, causes of action, claims, damage,
liability, loss, or costs ("Claims") (together with attorneys' fees)
arising out of, resulting from, or connected with the death of or
any injury to, or any damage to the property of, Subcontractor or
its employees, agents, or subcontractors or any of their respective
subcontractors, employees, officers, agents, or invitees.

(2) For all Claims not covered by (1) above and to the fullest extent
permitted by law, Subcontractor agrees to release, indemnify,
defend, and hold harmless the Indemnitees for, and to save them
harmless against, any and all Claims (together with reasonable
attorneys' fees), to the extent of liability resulting from
Subcontractor's negligence or willful misconduct incurred by the
Indemnitees which arise out of or relate to (i) any alleged personal
injury, death, or property damage arising from or connected with
the Work; (ii) any alleged defect or malfunction in any of the
services or materials provided in connection with the Work; or
(iii) omissions resulting from Indemnitee's failure to supervise
Subcontractor's operations.
....

SECTION 8. Payment to Subcontractor.

....

i. Indemnification. Subcontractor hereby agrees to indemnify,
defend, and save Contractor and Owner harmless from and against
any mechanics' and materialmen's liens upon the Project, attorneys'
fees and expenses, amounts paid in settlement, and amounts paid to
discharge judgments arising out of the services, labor, equipment, or
materials furnished by Subcontractor or its employees, suppliers, or
subcontractors. If Subcontractor fails to do so, Contractor may deduct
from sums then or thereafter due to Subcontractor such amounts as
Contractor deems appropriate in its sole discretion to indemnify
Contractor and Owner from liens, claims, and encumbrances.
Contractor may, in its sole discretion, cure any liens or satisfy any
demands, and recover its costs related directly or indirectly thereto
from Subcontractor. Subcontractor hereby waives, releases, and
forever discharges Contractor and Owner from all costs, expenses,
claims, demands, damages, losses, causes of action, or liabilities that
Subcontractor may have against Contractor or Owner that arise
directly or indirectly from curing any such liens, claims,
encumbrances, or demands.

SECTION 9. Miscellaneous.

....

f. Other. This Agreement embodies the entire agreement between the
parties and supersedes all prior agreements and understandings. This
Agreement may be amended or supplemented only by an instrument
in writing executed by the party against whom enforcement is sought.
No delay or failure by Contractor to exercise any right or remedy
hereunder, and no partial or single exercise of such right or remedy,
will constitute a waiver of that or any other right or remedy. The
duties and obligations imposed by this Agreement and rights and
remedies available hereunder shall be in addition to and not a
limitation of duties, obligations, rights, and remedies otherwise
imposed or available by law. The prevailing party to any dispute shall
have a right to collect its reasonable attorney's fees and expenses.
This Agreement shall be governed by the laws of the State of Texas,
without regard to the conflicts of law provisions thereof. The
provisions of this Agreement shall be deemed independent and
severable, and the invalidity or partial invalidity of any provision or
portion thereof shall not affect the validity or enforceability of any
other provision or portion thereof. It is the intent of the parties that
any invalid provision hereof be reformed to the extent necessary to
make it enforceable to the maximum extent of the law.

(Italics added for emphasis).

The Later Contracts govern BFS's relationships with Hurley, ECC, ACC, WSC,
Pohlman, and L&G (the Later Subcontractors). These contain similar language,
including the indemnification language of Section 5, which BFS contends is the
relevant indemnification language in the Later Contracts:

SECTION 1. Introduction.

a. Work. This Agreement contains the basic terms and conditions
under which Subcontractor agrees to provide materials and/or to
perform services (the "Work") from time to time for Contractor on
any project (the "Project"). TIME IS OF THE ESSENCE. It will
apply to and govern all Work requested by Contractor from
Subcontractor at any time following the date of this Agreement,
unless other terms and conditions are specifically agreed to in writing
by Contractor with respect to particular items of Work or until this
Agreement is terminated as hereinafter provided. In accordance with
the terms and conditions contained in this Agreement, Subcontractor
will perform and finish in a good and workmanlike manner, and will
furnish all required materials, labor, equipment, supplies and tools for,
the Work described from time to time for Contractor on any Project.
Projects may or may not be owned or controlled by Contractor's
customer (the "Owner"). The Work will be performed in accordance
with plans, specifications, drawings and schedules for the Work, and
any supplemental terms and conditions to this Agreement, all of
which are, or will be, on file at the office of the Contractor (the
"Contract Documents") and incorporated into the Agreement by
reference as if fully set forth. Contractor will have the right at any
time to supplement the plans and specifications for the Work with
additional or replacement drawings and schedules or other documents
and upon so doing such drawings and schedules will immediately
become part of the Contract Documents. The Contract Documents,
including any time schedules, may be amended and/or supplemented
from time to time by giving Subcontractor written notice thereof.
Subcontractor's only remedy in the event an amendment or
supplement to the Contract[] Documents materially increases the cost
or difficulty of performance by the Subcontractor is to terminate this
Agreement by written notice to Contractor within 24 hours after
Contractor delivers such amendment or supplement to Subcontractor.

....

SECTION 2. Materials and Workmanship.
Subcontractor agrees to commence Work on Projects upon request by
Contractor. Subcontractor agrees to provide all labor, services,
equipment, and tools necessary to complete the Work.

....

c. Protection of Work. Subcontractor shall bear all risk of loss or
damage to the Work resulting from any cause whatsoever until
Subcontractor has completed its Work on the Project and such work
has been accepted by Contractor and Owner. Subcontractor shall at
all times, and at its expense, protect all of its labor, materials
(regardless of who supplied such materials), supplies, tools, and
equipment (and those of its employees, agents, and subcontractors)
against any damage, injury, destruction, theft, or loss. Subcontractor
shall, at its expense, promptly repair or replace damage to the Work or
damage to any other components of the Project resulting from the
activities of Subcontractor or its employees, agents, or subcontractors.

....

SECTION 3. Warranty.
In addition to any other warranty or guarantee expressly made by
Subcontractor or implied by Law, Subcontractor unconditionally
warrants and guarantees the Work will conform to any specifications
provided by Contractor and comply with all Law and Subcontractor
guarantees the Work against defects in design, workmanship, and
materials for the benefit of Contractor and its successors and assigns,
Owner, as well as the ultimate owner of any structure into which the
Work is incorporated. This guarantee will commence upon the
Subcontractor's completion of the Work and will continue for a
minimum of (a) three (3) years for all Work except, (b) ten (10) years
for all Work consisting of any structural applications . . . . If demand
is made upon Subcontractor to perform under this warranty,
Subcontractor at its sole cost and expense will expeditiously repair or
replace, at Contractor's sole option, any defective or nonconforming
Work and indemnify Contractor and any other party for any costs
incurred by any party relating to such demand. This warranty shall
extend to all consequential damages resulting from such faults and/or
defects of design, material, and workmanship described in this
Section, including, without limitation, property damage to the homes
or properties into which the Work is incorporated, property damage
to the personal property of the ultimate owners of such homes or
structures, and personal injury damages to persons residing at or
visiting the properties into which the Work is incorporated. . . . This
warranty is independent from all other obligations of Subcontractor
under this Agreement, including, without limitation, all
indemnification provisions, and will apply whether or not required by
any other provision of this Agreement. Owner and any ultimate
owner of any structure into which the Work is incorporated shall be
intended non-incidental third-party beneficiaries of this Agreement
and shall have the power to enforce this Agreement. Subcontractor
will maintain a published phone number or answering service during
normal working hours.

....

SECTION 5. INDEMNITY.
TO THE FULLEST EXTENT PERMITTED BY LAW, THE
SUBCONTRACTOR SHALL INDEMNIFY, DEFEND, AND
HOLD HARMLESS THE CONTRACTOR, THE OWNER, AND
ALL OF THEIR OFFICERS, DIRECTORS, AGENTS, AND
EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS,
SUITS, LOSSES, CAUSES OF ACTION, DAMAGES,
LIABILITIES, FINES, PENALTIES, AND EXPENSES OF ANY
KIND WHATSOEVER, INCLUDING, BUT NOT LIMITED TO,
ARBITRATION OR COURT COSTS AND ATTORNEY'S FEES
(SUCH LEGAL EXPENSES TO INCLUDE COSTS INCURRED
IN ESTABLISHING THE INDEMNIFICATION AND OTHER
RIGHTS AGREED TO IN THIS PARAGRAPH) ARISING OUT
OF OR RESULTING FROM BODILY INJURY OR DEATH OF
ANY PERSON, OR PROPERTY DAMAGE, INCLUDING LOSS
OF USE OF PROPERTY, ARISING OR ALLEGED TO ARISE
OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT
OR THE SUBCONTRACTOR'S PERFORMANCE OF THE
WORK OR OTHER ACTIVITIES OF THE
SUBCONTRACTOR, BUT ONLY TO THE EXTENT CAUSED IN
WHOLE OR IN PART BY ANY NEGLIGENT ACT OR
OMISSION OF THE SUBCONTRACTOR OR ANYONE
DIRECTLY OR INDIRECTLY EMPLOYED BY THE
SUBCONTRACTOR OR ANYONE FOR WHOSE ACTS THE
SUBCONTRACTOR MAY BE LIABLE. THE CONTRACTOR'S
INSURANCE REQUIREMENTS WHICH SUBCONTRACTOR
IS SUBJECT TO UNDER THIS AGREEMENT ARE
SEPARATE AND DISTINCT FROM THE REQUIREMENT OF
INDEMNIFICATION HEREUNDER.

NOTWITHSTANDING THE FOREGOING, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE SUBCONTRACTOR
SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS,
THE CONTRACTOR, THE OWNER, AND ALL OF THEIR
OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES (THE
"INDEMNITEES"), FROM AND AGAINST ANY AND ALL
CLAIMS, DAMAGES, LOSSES, AND EXPENSES,
INCLUDING, BUT NOT LIMITED TO, ATTORNEY'S FEES
(SUCH LEGAL EXPENSES TO INCLUDE COSTS INCURRED
IN ESTABLISHING THE INDEMNIFICATION AND OTHER
RIGHTS AGREED TO IN THIS PARAGRAPH) ARISING OUT
OF OR RESULTING FROM BODILY INJURY TO, OR
SICKNESS, DISEASE, OR DEATH OF, THE
SUBCONTRACTOR, ANY AGENT, EMPLOYEE, OR
REPRESENTATIVE OF THE SUBCONTRACTOR, OR ANY
OF ITS SUBCONTRACTORS, REGARDLESS OF WHETHER
SUCH CLAIM, DAMAGE, LOSS, OR EXPENSE IS CAUSED, OR
IS ALLEGED TO BE CAUSED, IN WHOLE OR IN PART, BY
THE NEGLIGENCE OF ANY OF THE INDEMNITEES, IT
BEING THE EXPRESSED INTENT OF THE CONTRACTOR
AND THE SUBCONTRACTOR THAT IN SUCH EVENT THE
SUBCONTRACTOR IS TO INDEMNIFY, DEFEND, AND
HOLD HARMLESS THE INDEMNITEES FROM THE
CONSEQUENCES OF THEIR OWN NEGLIGENCE,
WHETHER IT IS OR IS ALLEGED TO BE THE SOLE OR
CONCURRENT CAUSE OF THE BODILY INJURY,
SICKNESS, DISEASE, OR DEATH OF THE
SUBCONTRACTOR, SUBCONTRACTOR'S AGENT,
EMPLOYEE, OR REPRESENTATIVE, OR THE AGENT,
EMPLOYEE, OR REPRESENTATIVE OF ANY OF ITS
SUBCONTRACTORS. THE INDEMNIFICATION
OBLIGATIONS UNDER THIS PARAGRAPH SHALL NOT BE
LIMITED BY ANY LIMITATION ON THE AMOUNT OR
TYPE OF DAMAGES, COMPENSATION, OR BENEFITS
PAYABLE BY OR FOR SUBCONTRACTOR UNDER
WORKERS COMPENSATION ACTS, DISABILITY BENEFIT
ACTS, OR OTHER EMPLOYEE BENEFIT ACTS. THE
SUBCONTRACTOR SHALL PROCURE LIABILITY
INSURANCE COVERING ITS OBLIGATIONS UNDER THIS
SECTION 5.

THE DUTY TO DEFEND UNDER THIS SECTION 5 IS
INDEPENDENT AND SEPARATE FROM THE DUTY TO
INDEMNIFY, AND THE DUTY TO DEFEND EXISTS
REGARDLESS OF ANY ULTIMATE LIABILITY OR
NEGLIGENCE OF THE CONTRACTOR, THE OWNER, OR ANY
OF THEIR OFFICERS, DIRECTORS, AGENTS, AND
EMPLOYEES. THE DUTY TO DEFEND ARISES
IMMEDIATELY UPON PRESENTATION OF A CLAIM BY
ANY PARTY INDEMNIFIED HEREUNDER AND WRITTEN
NOTICE OF SUCH CLAIM BEING PROVIDED TO
SUBCONTRACTOR. SUBCONTRACTOR'S OBLIGATION
TO INDEMNIFY, DEFEND, AND HOLD HARMLESS UNDER
THIS SECTION 5 WILL SURVIVE THE EXPIRATION OR
EARLIER TERMINATION OF THIS AGREEMENT UNTIL IT
IS FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION OR ARBITRATION PANEL THAT A CLAIM
AGAINST THE CONTRACTOR, THE OWNER, AND ANY OF
THEIR OFFICERS, DIRECTORS, AGENTS, AND
EMPLOYEES FOR THE MATTER INDEMNIFIED
HEREUNDER IS FULLY AND FINALLY BARRED BY THE
APPLICABLE STATUTE OF LIMITATIONS.

THE DEFENSE AND INDEMNIFICATION OBLIGATIONS
UNDER THIS AGREEMENT ARE NOT INTENDED TO AND
SHALL NOT REQUIRE THE SUBCONTRACTOR OR
OTHERS TO INDEMNIFY OR HOLD HARMLESS A
REGISTERED ARCHITECT, LICENSED ENGINEER, OR AN
AGENT, SERVANT, OR EMPLOYEE OF A REGISTERED
ARCHITECT OR LICENSED ENGINEER FROM LIABILITY
FOR DAMAGE THAT IS (a) CAUSED BY OR RESULTS
FROM: (1) DEFECTS IN PLANS, DESIGNS, OR
SPECIFICATIONS PREPARED, APPROVED, OR USED BY
THE ARCHITECT OR ENGINEER; OR (2) THE
NEGLIGENCE OF THE ARCHITECT OR ENGINEER IN THE
RENDITION OR CONDUCT OF PROFESSIONAL DUTIES
CALLED FOR OR ARISING OUT OF THE CONSTRUCTION
CONTRACT AND THE PLANS, DESIGNS, OR
SPECIFICATIONS THAT ARE A PART OF THE
CONSTRUCTION CONTRACT; AND (b) ARISES FROM
PERSONAL INJURY OR DEATH, PROPERTY INJURY, OR
ANY OTHER EXPENSE THAT ARISES FROM PERSONAL
INJURY, DEATH OR PROPERTY INJURY.

....

SECTION 8. Payment to Subcontractor.

....

i. INDEMNIFICATION FOR LIENS. TO THE FULLEST
EXTENT PERMITTED BY LAW, SUBCONTRACTOR
HEREBY AGREES TO INDEMNIFY, DEFEND, AND HOLD
HARMLESS THE CONTRACTOR, THE OWNER, AND ALL
OF THEIR OFFICERS, DIRECTORS, AGENTS, AND
EMPLOYEES FROM AND AGAINST ANY MECHANICS'
AND MATERIALMEN'S LIENS UPON THE PROJECT,
ATTORNEYS' FEES AND EXPENSES, AMOUNTS PAID IN
SETTLEMENT, AND AMOUNTS PAID TO DISCHARGE
JUDGMENTS ARISING OUT OF THE SERVICES, LABOR,
EQUIPMENT, OR MATERIALS FURNISHED BY
SUBCONTRACTOR, OR ITS EMPLOYEES, SUPPLIERS, OR
SUBCONTRACTORS. IF SUBCONTRACTOR FAILS TO DO
SO, CONTRACTOR MAY DEDUCT FROM SUMS THEN OR
THEREAFTER DUE TO SUBCONTRACTOR SUCH
AMOUNTS AS CONTRACTOR DEEMS APPROPRIATE IN
ITS SOLE DISCRETION TO INDEMNIFY THE
CONTRACTOR, THE OWNER, AND ALL OF THEIR
OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES
FROM SUCH LIENS, CLAIMS, AND ENCUMBRANCES.
CONTRACTOR MAY, IN ITS SOLE DISCRETION, CURE
ANY LIENS OR SATISFY ANY DEMANDS, AND RECOVER
ITS COSTS RELATED DIRECTLY OR INDIRECTLY
THERETO FROM SUBCONTRACTOR. SUBCONTRACTOR
HEREBY WAIVES, RELEASES, AND FOREVER DISCHARGES
THE CONTRACTOR, THE OWNER, AND ALL OF THEIR
OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES FROM
ALL COSTS, EXPENSES, CLAIMS, DEMANDS, DAMAGES,
LOSSES, CAUSES OF ACTION, OR LIABILITIES THAT
SUBCONTRACTOR MAY HAVE AGAINST THE CONTRACTOR,
THE OWNER, AND ALL OF THEIR OFFICERS, DIRECTORS,
AGENTS, AND EMPLOYEES THAT ARISE DIRECTLY OR
INDIRECTLY FROM CURING ANY SUCH LIENS, CLAIMS,
ENCUMBRANCES, OR DEMANDS.

SECTION 9. Miscellaneous.

....

f. Other. This Agreement embodies the entire agreement between the
parties and supersedes all prior agreements and understandings. This
Agreement may be amended or supplemented only by an instrument
in writing executed by the party against whom enforcement is sought.
No delay or failure by Contractor to exercise any right or remedy
hereunder, and no partial or single exercise of such right or remedy,
will constitute a waiver of that or any other right or remedy. The
duties and obligations imposed by this Agreement and rights and
remedies available hereunder shall be in addition to and not a
limitation of duties, obligations, rights, and remedies otherwise
imposed or available by Law. The prevailing party to any dispute
shall have a right to collect its reasonable attorney's fees and expenses.
This Agreement shall be governed by the laws of the State of Texas,
without regard to the conflicts of law provisions thereof. The
provisions of this Agreement shall be deemed independent and
severable, and the invalidity or partial invalidity of any provision or
portion thereof shall not affect the validity or enforceability of any
other provision or portion thereof. It is the intent of the parties that
any invalid provision hereof be reformed to the extent necessary to
make it enforceable to the maximum extent of the law.

(Italics added for emphasis).

I. Clear and Unequivocal Standard

BFS argues the circuit court erroneously applied the clear and unequivocal
standard articulated in Concord & Cumberland to the relevant contractual
language because BFS was not seeking indemnity for its own negligence. We
disagree, as BFS's position is inconsistent with the language of its own claims as
well as the convoluted language within the challenged indemnity provisions.

Courts consistently define indemnity as "'that form of compensation in which a
first party is liable to pay a second party for loss or damage the second party incurs
to a third party.'" Concord & Cumberland, 424 S.C. at 646–47, 819 S.E.2d at 170
(quoting Laurens Emergency Med. Specialists, PA v. M.S. Bailey & Sons Bankers,
355 S.C. 104, 109, 584 S.E.2d 375, 377 (2003)). "Typically, courts will construe
an indemnification contract 'in accordance with the rules for the construction of
contracts generally.'" Id. (quoting Campbell v. Beacon Mfg. Co., 313 S.C. 451,
453, 438 S.E.2d 271, 272 (Ct. App. 1993)).

"[O]ur supreme court has generally held that a contract of indemnity may require a
party to indemnify an indemnitee against its own negligence if the 'intention is
expressed in clear and unequivocal terms.'" D.R. Horton, Inc. v. Builders
FirstSource-Se. Grp., LLC, 422 S.C. 144, 152, 810 S.E.2d 41, 45 (Ct. App. 2018)
(quoting Laurens Emergency Med. Specialists, PA, 355 S.C. at 111, 584 S.E.2d at
379). "[T]he clear and unequivocal standard applies any time an indemnitee is
seeking indemnification for its negligence, whether sole or concurrent." Concord
& Cumberland, 424 S.C. at 649, 819 S.E.2d at 172.

In Concord & Cumberland, a condominium regime and several unit owners sued a
general contractor (Superior) for construction defects. 424 S.C. at 643, 819 S.E.2d
at 168. Superior then brought claims against its window and door subcontractor
(Muhler), seeking contractual and equitable indemnification. Id. Superior settled
with the plaintiffs "for $775,000 and also claimed approximately $630,000 in
attorney's fees and expenses related to its defense of the window and door claims."
Id. at 644–45, 819 S.E.2d at 169. When Superior sought to recoup these funds
from Muhler, it became necessary for this court to examine the subcontract's
indemnity provisions. Superior urged the court to apply general rules of contract
interpretation, rather than the "clear and unequivocal" standard, to its contractual
indemnity claim, alleging it sought indemnity for its concurrent negligence, not its
sole negligence. Id. at 646, 819 S.E.2d at 170. Rejecting that argument, this court
found the clear and unequivocal standard applied whether the contractor "sought
indemnification for its sole or concurrent negligence." Id. 5

Here, Plaintiffs' fourth amended complaint alleges:

88. The deficiencies and defects which exist at the Project are the
proximate and direct result of the negligence and/or gross negligence

5
In a footnote, the Concord & Cumberland court noted even the American
Institute of Architects (AIA) form indemnity clause utilized at that time did not
satisfy the clear and unequivocal standard:

We recognize the challenges lawyers often face in drafting indemnity
provisions that can meet the strict "clear and unequivocal" test. In
fact, none of our precedents appear to have found a provision that has
met the standard. The provision here derived from an . . . AIA[] form.
The AIA is a respected organization, and its forms are used regularly
in the construction industry. Nevertheless, the indemnity clause at
issue here may have been influenced by the "clear and unequivocal"
standard. As the Texas Supreme Court has observed, this strict
construction test has caused drafters of indemnity provisions to write
them in a way that can be read as indemnifying the indemnitee for its
own negligence, "yet be just ambiguous enough to conceal that intent
from the indemnitor." Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d
705, 707–08 (Tex. S. Ct. 1987). What results are law suits that burden
courts with deciding whether the parties' intent was camouflaged or
"clear and unequivocal."

Id. at 658 n.6, 819 S.E.2d at 176 n.6.
of the Subcontractor Defendants [BFS and Respondents], and each of
them individually, in one or more of the following particulars:

a. in failing to properly construct the Project by deviating from the
plans and specifications and by failing to employ practices and
methods of construction conforming with accepted industry standards;
and/or using defective material; and/or installing materials not in
accordance with the plans and specifications, or in violation of the
manufacturer's instructions;

b. in failing to properly supervise their work and the work of other
trades in order to ensure that all work proceeded in accordance with
the plans and specifications and in conformity with the customary and
ordinary standards of the construction industry;

c. in accepting non-conforming or defective material;

d. in using and supplying defective materials;

e. in installing materials not in accordance with the plans and
specifications;

f. by installing materials in violation of manufacturer's instructions;

g. in accepting and performing deficient and/or defective
workmanship and/or materials without proper inspection to ensure
that the work was correct and in conformity with industry standards
and in accordance with the plans and specifications and the
manufacturer's instructions;

h. in constructing the Project in violation of the applicable building
codes; and

i. in failing to inform the architect, owner or general contractor of
defects in the plans and specifications

The particulars of negligence alleged at subparts b, c, d, g, and i speak to BFS's
duties in its role as a supplier of Project materials as well as the duties of BFS and
any subcontractors responsible for supervising, inspecting, and approving the
work.
BFS's contractual indemnification claim is found within the following paragraphs
of its amended answer to the fourth amended complaint and asserted crossclaim:

133. That the Plaintiff, The Retreat at Charleston National Country
Club HOA, Inc., and The Retreat at Charleston National Country Club
Horizontal Property Regime, have sued Builders FirstSource-
Southeast Group, LLC (hereinafter sometimes "BFS"), asserting
damages allegedly caused, inter alia, by deficiencies in framing,
including but not limited to deficiencies in the installation of
windows, doors, and related components, during original construction
of the subject structures.

134. That BFS has denied the material allegations asserted against
BFS in the Plaintiffs' Fourth Amended Complaint.

135. That the respective subcontracts between this Defendant and the
Cross Claim Defendants, provide for contractual indemnification in
favor of BFS.

136. That the Cross Claim Defendants served as subcontractors to
BFS in connection with their services at the subject structures.
Regardless, therefore, of any specific contractual obligation to
indemnify, there exists a special relationship between this Defendant,
and the Cross Claim Defendants, sufficient to impose obligations of
indemnity against the aforesaid Cross Claim Defendants, in favor of
BFS.

137. That to the extent, if any, that BFS may be held liable to the
Plaintiffs, or to others in this action, such liability would be a direct
and proximate result of the wrongful acts, omissions, negligence,
gross negligence, and/or representations of the Cross Claim
Defendants, which have damaged BFS, as BFS has been subjected to
liability and has incurred consequential damages in having to expend
attorneys' fees and costs in defending against the Plaintiffs' claims.

138. That BFS is entitled to full contractual and common law
indemnification from the Cross Claim Defendants, for any liability
BFS is found to have to the Plaintiffs or to others in this action, and
BFS is also entitled to damages for any negligence, as aforesaid, on
the part of the Cross Claim Defendants, entitling BFS to recover from
the Cross Claim Defendants, its attorneys' fees, costs, and other
expenses incurred in defending this action, and further entitling BFS
to recover from the Cross Claim Defendants any sums for which BFS
may be held liable to the Plaintiffs or to others, or which Builders
FirstSource-Southeast Group, LLC may pay in satisfaction of such
claims.

(emphasis added). Similar language addresses the third-party defendants:

163. That BFS has denied the material allegations asserted against
BFS in the Plaintiffs' Amended Complaint.

....

167. That to the extent, if any, that BFS may be held liable to the
Plaintiffs, or to others in this action, such liability would be a direct
and proximate result of the wrongful acts, omissions, negligence,
and/or representations of the Third-Party Defendants, which have
damaged BFS, as BFS has been subjected to liability and has incurred
consequential damages in having to expend attorneys' fees and costs
in defending against the Plaintiffs' claims.

168. That BFS is entitled to full contractual and common law
indemnification from the Third-Party Defendants, for any liability
BFS is found to have to the Plaintiffs or to others in this action, and
BFS is also entitled to damages for any negligence, as aforesaid, on
the part of the Third-Party Defendants, entitling BFS to recover from
the Third-Party Defendants, its attorneys' fees, costs, and other
expenses incurred in defending this action, and further entitling BFS
to recover from the Third-Party Defendants any sums for which BFS
may be held liable to the Plaintiffs or to others, or which Builders
FirstSource-Southeast Group, LLC may pay in satisfaction of such
claims.

(emphases added). BFS alleges in its contractual indemnification claims, as well
as in conjunction with other claims not at issue on appeal, that it seeks recovery for
any sums for which BFS may be held liable to the Plaintiffs or others, in addition
to attorneys' fees and costs from Respondents. In our view, the wording of
paragraphs 138 and 168 leaves little doubt that BFS's pleadings also seek
indemnification for its own negligence.
A. 2005 Contracts

The sections of the two orders addressing the Concord & Cumberland arguments
are identical—both found the Section 6 indemnity "language is inherently
confusing" and "the language contained in the indemnity clause does not clearly
and unequivocally provide for indemnity for BFS's own negligence." Additionally,
both orders provide "the indemnity and duty to defend provisions of the Master
Agreement . . . are neither clear nor unequivocal and, thus, fail as a matter of law."

We view the language in Section 6 as inherently confusing insofar as it calls for the
2005 Subcontractors to indemnify BFS for BFS's sole negligence while also
claiming to limit the indemnity "to the extent" of the 2005 Subcontractors' own
negligence. Thus, we agree with the circuit court that the language contained in
the indemnity clause does not clearly and unequivocally provide for indemnity for
BFS's own negligence. Accordingly, we affirm the circuit court's rulings that the
indemnity provisions of the 2005 Contracts are neither clear nor unequivocal, and
that BFS's contractual indemnity claims against Palmetto and East Coast fail as a
matter of law.

B. Later Contracts

In the current case, BFS contends it is not seeking indemnity for loss or damage
arising from its own negligence, but rather indemnity only against liability for loss
or damage arising from the sole or concurrent negligent acts or omissions of its
subcontractors in the performance of their work. Thus, BFS asserts the clear and
unequivocal standard of Concord & Cumberland should not apply. However, our
review of the indemnification and defense provisions in Sections 3 and 5 of the
Later Contracts—as well as the language of BFS's crossclaims—reveals this not to
be so. Sections 3 and 5 of the Later Contracts neither require any finding of fault
on the part of the Later Subcontractors nor exclude any fault of BFS. Instead,
these sections expressly reference indemnification for the sole negligence of BFS.

Moreover, the indemnity provision buried in the fine print of Section 3 of the Later
Contracts contains a warranty provision that would allow BFS to seek indemnity
for personal injuries and property damage arising from the sole negligence of BFS
in selecting and selling the products BFS provided to the Later Subcontractors for
installation. Because this indemnity provision is hidden among warranty and
guaranty language, we agree with the circuit court that it fails to satisfy the clear
and unequivocal standard.
Section 5 of the Later Contracts contains multiple indemnity clauses. The first
paragraph of Section 5 is based in part on the same AIA form indemnification
language stating "but only to the extent caused in whole or in part by any negligent
act or omission on the part of subcontractor." See Concord & Cumberland, 424
S.C. at 643–44, 819 S.E.2d at 168–69. As the Concord & Cumberland court
found, this language does not meet the heightened standard of interpretation for
contracts seeking to relieve the indemnitee of the consequences of its own
negligence. Id. at 658 n.6, 819 S.E.2d at 176 n.6.

Additionally, the second paragraph of Section 5 contradicts the first paragraph by
purportedly requiring the Later Subcontractors to indemnify BFS (and others) even
if it is alleged that the loss was caused by BFS. 6 The language of these two
paragraphs cannot be reconciled. Further, the third paragraph of Section 5 is a
disguised indemnity provision for defense costs. By claiming it is not seeking
indemnification for its own negligence, BFS asks this court to ignore its pleadings

6
In its crossclaims, BFS states:

That BFS is entitled to full contractual and common law
indemnification from the Cross Claim Defendants, for any liability
BFS is found to have to the Plaintiffs or to others in this action, and
BFS is also entitled to damages for any negligence, as aforesaid, on
the part of the Cross Claim Defendants, entitling BFS to recover from
the Cross Claim Defendants, its attorneys' fees, costs, and other
expenses incurred in defending this action, and further entitling BFS
to recover from the Cross Claim Defendants any sums for which BFS
may be held liable to the Plaintiffs or to others, or which Builders
FirstSource-Southeast Group, LLC may pay in satisfaction of such
claims.

See, e.g., Skull Creek Club Ltd. P'ship v. Cook & Book, Inc., 313 S.C. 283, 289,
437 S.E.2d 163, 166 (Ct. App. 1993) ("It is well settled that parties are judicially
bound by their pleadings unless withdrawn, altered[,] or stricken by amendment or
otherwise. The allegations, statements, or admissions contained in a pleading are
conclusive as against the pleader and a party cannot subsequently take a position
contradictory of, or inconsistent with, his pleadings[,] and the facts which are
admitted by the pleadings are taken as true against the pleader for the purpose of
the action." (quoting Postal v. Mann, 308 S.C. 385, 387, 418 S.E.2d 322, 323 (Ct.
App. 1992))).
and the Later Contracts' language, which it drafted, and to disregard controlling
authority. We find the relevant provisions of the Later Contracts are not
sufficiently clear and unequivocal to require the Later Subcontractors to indemnify
BFS for BFS's own negligence (to the extent BFS seeks such indemnification).
Accordingly, we affirm the circuit court's rulings that the indemnity provisions of
the Later Contracts are neither clear nor unequivocal and that BFS's claims must
fail as a matter of law.

II. Section 32-2-10 and Public Policy

BFS argues the circuit court erred in finding the contractual language permitting
BFS to recover for its subcontractors' negligence violates section 32-2-10 of the
South Carolina Code (2007) and public policy. We disagree.

"The cardinal rule of contract interpretation is to ascertain and give legal effect to
the parties' intentions as determined by the contract language." Whitlock v. Stewart
Title Guar. Co., 399 S.C. 610, 614, 732 S.E.2d 626, 628 (2012) (quoting McGill v.
Moore, 381 S.C. 179, 185, 672 S.E.2d 571, 574 (2009)). "Courts must enforce, not
write, contracts of insurance, and their language must be given its plain, ordinary
and popular meaning." Id. (quoting USAA Prop. & Cas. Ins. Co. v. Clegg, 377
S.C. 643, 655, 661 S.E.2d 791, 797 (2008)). "A contract is read as a whole
document so that one may not create an ambiguity by pointing out a single
sentence or clause." Williams v. Gov't Emps. Ins. Co. (GEICO), 409 S.C. 586, 595,
762 S.E.2d 705, 710 (2014) (quoting McGill, 381 S.C. at 185, 672 S.E.2d at 574).

The statute at issue provides, in pertinent part:

Notwithstanding any other provision of law, a promise or
agreement in connection with the design, planning, construction,
alteration, repair or maintenance of a building, structure, highway,
road, appurtenance or appliance, including moving, demolition and
excavating, purporting to indemnify the promisee, its independent
contractors, agents, employees, or indemnitees against liability for
damages arising out of bodily injury or property damage
proximately caused by or resulting from the sole negligence of the
promisee, its independent contractors, agents, employees, or
indemnitees is against public policy and unenforceable. Nothing
contained in this section shall affect a promise or agreement whereby
the promisor shall indemnify or hold harmless the promisee or the
promisee's independent contractors, agents, employees or indemnitees
against liability for damages resulting from the negligence, in whole
or in part, of the promisor, its agents or employees.

S.C. Code Ann. § 32-2-10 (emphasis added).

A. 2005 Contracts

Although § 32-2-10 allowed BFS and the 2005 Subcontractors to agree the 2005
Subcontractors will indemnify BFS for damages caused by the 2005
Subcontractors or their subs, the 2005 Contracts also contain multiple provisions
requiring the 2005 Subcontractors to indemnify (or defend) BFS for damages
incurred as a result of BFS's sole negligence. For example, Section 6 calls for the
2005 Subcontractors to unconditionally defend and indemnify BFS in subsection
(b)(1) and then calls for the 2005 Subcontractors to indemnify BFS for BFS's
failure to supervise in subsection (b)(2). These provisions violate § 32-2-10
because they seek to require the 2005 Subcontractors to indemnify BFS for its sole
negligence. See D.R. Horton, Inc., 422 S.C. at 152, 810 S.E.2d at 46 ("The
indemnification agreement in this case purports to require BFS to indemnify D.R.
Horton for its own negligence in violation of section 32-2-10. Because the
agreement violates the statute, we cannot require BFS to pay for damages caused
by D.R. Horton."). And, Section 8(i) of the 2005 Contracts provides for
indemnification of attorney's fees and expenses as well as amounts paid in
settlement without regard to BFS's fault. Therefore, we affirm the circuit court's
findings as to the public policy and statutory questions.

B. Later Contracts

While the statute allows BFS and the Later Subcontractors to agree that the Later
Subcontractors will indemnify BFS for damages caused by the Later
Subcontractors or their subs, Sections 3 and 5 of the Later Contracts obligate the
Later Subcontractors not only to warrant the design and suitability of the defective
materials and building components at the Project but also to indemnify and defend
BFS from any property damage or personal injury resulting from the water
intrusion issues related to the provided materials and building components.7

7
The language in Section 3 of the Later Contracts stating, "Subcontractor
guarantees the Work against defects in design, workmanship, and materials" only
makes sense if the words "design, workmanship, and materials" refer to the
defective materials and building components provided by BFS because the Later
Subcontractors had no responsibility for the design of the Project or any of its
Additionally, Section 8(i) of the Later Contracts provides for indemnification of
attorney's fees and expenses as well as amounts paid in settlement without regard
to the fault of BFS. So, the Later Contracts purport to require the Later
Subcontractors to indemnify BFS for its own negligence in selecting the framing
lumber, housewrap, windows, doors, related flashings, and caulk as well as
overseeing and inspecting the installation of the materials it provided for use in
constructing the Project. Such a provision violates § 32-2-10. See D.R. Horton,
Inc., 422 S.C. at 152, 810 S.E.2d at 46 ("The indemnification agreement in this
case purports to require BFS to indemnify D.R. Horton for its own negligence in
violation of section 32-2-10. Because the agreement violates the statute, we cannot
require BFS to pay for damages caused by D.R. Horton."). Moreover, because the
Later Contracts' indemnity provisions require the Later Subcontractors to
indemnify BFS against liability for damages from bodily injury or property
damage proximately caused by or resulting from the sole negligence of BFS, these
provisions are unenforceable under § 32-2-10. For these reasons, we affirm the
circuit court for this additional reason.

III. Collateral Estoppel 8

BFS next argues the circuit court erred in finding the doctrine of collateral estoppel
bars its indemnity claims because the prior judgments are both inapposite and not
final because they have been appealed. We disagree.

Collateral estoppel, also known as issue preclusion, prevents a party from
relitigating an issue that was "'actually litigated and determined by a valid and final
judgment'" in a previous action, "regardless of whether the claims in the first and
subsequent suits are the same." Judy v. Judy, 383 S.C. 1, 7, 677 S.E.2d 213, 217
(Ct. App. 2009) (quoting Zurcher v. Bilton, 379 S.C. 132, 135, 666 S.E.2d 224,
226 (2008)). Where the "illegality of the contract has been actually litigated and
directly determined in the prior action and that issue was essential to the
judgment," the application of offensive collateral estoppel is appropriate. S.C.
Prop. & Cas. Ins. Guar. Ass'n v. Wal-Mart Stores, Inc., 304 S.C. 210, 213, 403

components—including the materials. Further, even though BFS provided the
structural components, the Later Contracts appear to require the Later
Subcontractors to provide a ten-year warranty on "structural applications."
8
This issue is relevant only to the Later Contracts.
S.E.2d 625, 627 (1991). The party invoking collateral estoppel need not have also
been a party in the prior action; the law requires only that the party against whom
estoppel is applied have been a party with a full and fair opportunity to litigate the
issue. Id. ("Nonmutual collateral estoppel may be asserted unless the party
precluded lacked a full and fair opportunity to litigate the issue in the first
action . . . .").

There is no dispute that BFS is the party seeking to enforce the indemnity clauses
of the Later Contracts (which are identical to those previously litigated). It further
cannot be disputed that BFS was the party litigating the issue of enforceability in
other construction defect cases before the circuit court. The circuit court had
previously addressed the Later Contracts' indemnity language in MI Windows &
Doors, Dag Pavic and Stela Susas-Pavic, and Six Fifty-Six Owners' Association, et
al. Although BFS had appealed these orders, the circuit court did not err in finding
the same terms had been actually litigated and directly determined in a prior action.
A judgment is final and remains final unless and until it has been overturned on
appeal. See Huron Holding Corp. v. Lincoln Mine Operating Co., 312 U.S. 183,
189 (1941) (finding finality of a court's judgment is not lost because appeal is
pending unless and until reversed).

The rationale behind this rule is that if cases on appeal were not viewed as final
judgments for collateral estoppel purposes, parties could simply refile in trial court
while an appeal is pending and hope for a different result, thus subjecting courts
(and parties) to inefficient duplicative litigation. See generally Warwick Corp. v.
Maryland Dep't of Transp., 573 F. Supp. 1011, 1014 (D. Md. 1983) ("Such a
consequence would also be laughable. If a judgment was denied its res judicata
effect merely because an appeal was pending, litigants would be able to refile an
identical case in another trial court while the appeal is pending, which would
hog-tie the trial courts with duplicative litigation."), aff'd Warwick Corp. v.
Maryland Dep't of Transp., 735 F.2d 1359 (4th Cir. 1984). That appeals were
pending at the time of the circuit court's rulings in these eight cases in no way
changes the result: the prior findings have preclusive effect unless and until those
dispositive findings are reversed. The indemnity clauses in the Later Contracts are
the same clauses from the same agreement at issue in MI Windows & Doors,
Pavic, and Six Fifty-Six Owners' Association. Because BFS had previously
litigated the enforceability of its contractual indemnity provisions, the circuit court
properly applied collateral estoppel.

IV. Severability
BFS next asserts the circuit court erred in failing to address the severability
provision of the 2005 Contracts and the Later Contracts, and where the circuit
court did address severability, it erred in holding it lacked authority to sever the
offending provisions.9 Again, we disagree.

In both sets of contracts, the severability clause states, "The provisions of this
Agreement shall be deemed independent and severable, and the invalidity or partial
invalidity of any provision or portion thereof shall not affect the validity or
enforceability of any other provision or portion thereof." However, because the
indemnity provisions are replete with terms that violate South Carolina law and
public policy, these terms cannot be effectively severed. Among other things, the
contracts require the 2005 Subcontractors to indemnify BFS for claims of death,
personal injury, and property damage—regardless of BFS's negligence—and
require subcontractors to defend BFS in the case of BFS's sole negligence.

Because the indemnity provisions themselves violate South Carolina law, we reject
BFS's invitation to rewrite them. Cf. Concord & Cumberland, 424 S.C. at 656,
819 S.E.2d at 175 ("Merging the indemnity clauses into one clause by replacing
some language but leaving other language in place would amount to rewriting the
indemnity clauses into a contractual term to which Muhler did not agree. In the
absence of clear and express language in the 2007 Agreement instructing what
phrases replace specific terms in the [s]ubcontract, we decline Superior's invitation
to rewrite the indemnity clauses. The circuit court properly interpreted each
indemnity clause according to its own terms."); Doe v. TCSC, LLC, 430 S.C. 602,
615, 846 S.E.2d 874, 880 (Ct. App. 2020) (noting "[c]ourts have discretion . . . to
decide whether a contract is so infected with unconscionability that it must be
scrapped entirely, or to sever the offending terms so the remainder may survive").

V. Unconscionable and Unenforceable

Finally, BFS argues the circuit court erred in finding the warranty, contractual
indemnity, and duty to defend provisions of the Later Contracts are unconscionable
and unenforceable as a matter of law. We disagree.

"[U]nder general principles of state contract law, an adhesion contract is a standard
form contract offered on a 'take-it-or-leave-it' basis with terms that are not
negotiable." Simpson v. MSA of Myrtle Beach, Inc., 373 S.C. 14, 26–27, 644
S.E.2d 663, 669 (2007). In Simpson, our supreme court found an arbitration clause

9
The language of Section 9(f) is the same in the 2005 and Later Contracts.
in an adhesion contract with unconscionable terms "wholly unenforceable," despite
the presence of a separate contractual severability clause, due to the "cumulative
effect of a number of oppressive and one-sided provisions contained within the
entire clause." Id. at 33–36, 644 S.E.2d at 673–74. The contractual severability
provision did not result in an exception to the general rule of unenforceability of
illegal contracts, especially where the contract was one-sided, oppressive, or a
contract of adhesion. Id. at 29–30, 644 S.E.2d at 671.

In Damico v. Lennar Carolinas, LLC, our supreme court emphasized the
distinction between a contract of adhesion and the question of unconscionability:

[A]dhesive contracts are not unconscionable in and of themselves so
long as the terms are even-handed. Nevertheless, and regrettably, it
is common practice for the sophisticated drafter of contracts to
routinely argue that a particular contract is not one of adhesion when
that is plainly untrue. Such a specious argument does not advance the
party's position and instead detracts from other legitimate arguments
the party may have. After all, unconscionability requires a finding of
a lack of meaningful choice coupled with unreasonably oppressive
terms. Thus, an adhesion contract with fair terms is certainly not
unconscionable, and the mere fact a contract is one of adhesion does
not doom the contract-drafter's case.

437 S.C. 596, 614, 879 S.E.2d 746, 756 (2022).

The Later Subcontractors installed products for BFS, the regional division of
Builders FirstSource, arguably a sophisticated drafter of contracts given its
regional reach and its multiple subcontractor contracts on several Lowcountry
projects. As discussed in sections I and II, supra, the warranty, guaranty, and
indemnity provisions of the Later Contracts violate § 32-2-10, are ambiguous,
conflict with each other, and do not meet the clear and unequivocal standard
articulated in Concord & Cumberland.

The disparity in bargaining power along with the ambiguous terms in these
adhesion contracts deprived the Later Subcontractors of any meaningful choice
when entering the Later Contracts. The Later Contracts give the drafter expansive
rights and remedies, while creating oppressive obligations or liabilities for the
Later Subcontractors and limiting or waiving their rights. We find it
inconceivable that a subcontractor with even a semblance of bargaining power who
understood the implications of the language in these agreements would sign them
unless there existed a total absence of meaningful choice. Accordingly, we affirm
the circuit court's findings that the pertinent provisions of the Later Contracts are
unconscionable and unenforceable as a matter of law.

Conclusion

For the foregoing reasons, the circuit court's eight orders are

AFFIRMED.

THOMAS, JJ., and VERDIN, A.J., concur.