South Carolina, like at least thirty-one other states, has a “right to cure” statute applicable to residential construction defect claims. The South Carolina Notice and Opportunity to Cure Construction Dwelling Defects Act, S.C. Code Ann. §40-59-810-860 (the “Act”) requires a claimant to serve written notice of a construction defect claim on the contractor at least ninety days before filing an action arising out of the construction of a dwelling. Like other states’ right to cure statutes, the South Carolina law includes a mandatory pre-suit inspection/opportunity to cure procedure and sets out the related rights or obligations of the respective parties. In an Order entered May 1, 2017 by S.C.’s Ninth Judicial Circuit Court, a former Chief Justice of the South Carolina Supreme Court, sitting by designation, ruled that a homeowner’s failure to follow the pre-suit steps required by the Act was fatal to the owner’s CD lawsuit and dismissed their case against the builder of their home.
In McIntire v. Seaquest Development Company, et al., Case No. 2016-CP-10-1833, McIntire had contracted with Seaquest to build a new home. Over several years, while living in their home, the McIntires claimed to have discovered a number of defects which they repaired. They then sued Seaquest.
Seaquest moved to dismiss the lawsuit because the McIntires failed to comply with the requirements of the Act by substantially completing the repairs to the home without prior notice to Seaquest and prior to filing suit. In granting Seaquest’s motion to dismiss the suit, the court found that when, as here, the claimant has substantially completed the repairs before notice to the builder, the alleged defects are destroyed without giving the builder an opportunity to inspect or cure them. Consequently, compliance with the Act is impossible, as is the builder’s right to inspect and cure. Had the McIntires merely filed suit before giving the required notice, the suit would probably have been stayed (i.e., suspended) pending the owners giving the required notice and opportunity to cure, but by undertaking the repairs prior to notice, the claimants effectively deprived the builder of its statutory right to inspect and repair on its own.
The ruling in McIntire came in a lower trial court, so it is not binding precedent in South Carolina, but because it was decided by a former S.C. Supreme Court Justice, and because the ruling applies an earlier analysis of the legislative intent underlying the Act found in the S.C. Supreme Court’s decision in Grazia v. South Carolina State Plastering, LLC, 3909 S.C. 562, 703 S.E. 2d 197 (S.C. 2010), it should be influential in cases with similar facts.
This case demonstrates the benefits of right to cure statutes now in place in the majority of states. These are builder-friendly laws that require good-faith attempts to resolve CD claims before resorting to litigation or arbitration. They allow builders to work with their customers before their disputes spiral into lawsuits or arbitrations. Builders should be knowledgeable about the notice requirements and other details of right to cure statutes if they build in states that have these laws and be alert to claimants’ failures to follow the rules.
PCF Insurance Services (PCF), a top 20 U.S. insurance brokerage firm, announced today its acquisition of Professional Warranty Service Corporation (PWSC)…