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Strict Enforcement of Pleading Requirements for Affirmative Defenses and Waiver of Closing Date due to Failure to provide "Time is of the Essence"
The Madrens purchased a tract of land in St. George for $82,000; this tract of land had two houses situated upon it. The Madrens subdivided the parcel and began renovations on the one of the houses (the "House"). In August of 2002, the Bradfords inquired about purchasing the House. Thereafter, the Madrens and Bradfords entered into a contract for the purchase of the House with a closing date of October 15, 2002. When the renovations were completed on October 30, 2002, after the closing date, the Madrens notified the Bradfords that the House was ready for a walk-through. In response, the Bradfords informed the Madrens that they no longer wished to purchase the House because the closing date had passed. The Madrens brought a breach of contract action against the Bradfords.
The trial court denied the Bradford's motion to dismiss on the ground that the contract was unenforceable because the Madrens did not have a contractor's license and found that the Bradfords breached their contract with the Madrens because the Bradfords waived the closing date. The court awarded the Madrens $55,000 in damages. The Bradfords appealed claiming that the trial court erred in denying their motion to dismiss and finding that they waived the closing date in the contract.
First, the Supreme Court noted that the Bradfords filed its motion to dismiss based on the Madren's lack of a contractor's license one month prior to trial and had not filed an amended answer asserting this affirmative defense. The Supreme Court found that failure to plead an affirmative defense is waiver of the right to later assert it. The Court found no error in the trial court denying the Bradford's motion to dismiss.
Second, the Supreme Court noted that in South Carolina, time is not of the essence unless it is made so by the terms of the contact. The Madren/Bradford contract provided a closing date and did not state that time was of the essence. Also, the Court found that the Bradfords waived the closing date by referring to an extended closing date in emails to the Madrens. The Supreme Court held that the Bradford's conduct modified the closing date in the contract and that the trial court did not err in finding that the Bradfords breached the contract. The Supreme Court also found that the trial court's award of $55,000 was reasonable even though it was based on the Madren's testimony because the Bradfords offered no testimony regarding the value of the House.
Parties to a contract should be aware that South Carolina courts strictly enforce its pleading requirements that affirmative defenses should be plead affirmatively in a responsive pleading and not as a motion to dismiss. Additionally, to at least bolster an argument that a closing date in the contract is not waived by a party's conduct, the contract should provide that "time is of the essence." |
