Tomlinson v. Sentry Engineering & Construction, Inc.

BUTZNER, Senior Circuit Judge: J.K. Tomlinson, who sues on behalf of two limited partnerships, appeals the district court’s denial of his motion for attorney’s fees incurred in his successful suit against Sentry Engineering and Construction, Inc., and the Western Casualty and Surety Company. Tomlinson contends: (1) the language of the performance bond into which Sentry entered with Western on Tomlinson’s behalf covered attorney’s fees; and (2) a surety can be held liable for attorney’s fees incurred by an innocent plaintiff in order to recover from the insured. Because these contentions are not supported by South Carolina law, we affirm. [919] On January 2, 1980, Tomlinson entered into a construction contract with Sentry for the construction of an apartment project. Sentry obtained a performance bond that provided: [T]he condition of this obligation is such that, if [Sentry] shall well and truly perform all of the undertakings, covenants, terms, conditions and agreements of [the Construction Contract dated January 2, 1980] on its part, and fully indemnify and save harmless [Tomlinson] from all cost and damage which [he] may suffer by reason of failure so to do, and fully reimburse and repay [Tomlinson] all outlay and expense which [Tomlinson] may incur in making good any such default, then this obligation shall be null and void; otherwise it shall remain in full force and effect. (Emphasis added.) Sentry defaulted. Tomlinson brought suit against both Sentry and its surety and recovered $74,500 for Sentry’s breach of the construction contract. There is no appeal from this judgment. Contending that the bond, particularly the underlined portions, encompassed attorney’s fees, Tomlinson moved for an order requiring Sentry and its surety to pay the fees. The district court denied this motion. South Carolina law authorizes recovery of attorney’s fees from a surety when a performance bond expressly obligates the surety to pay the fees as an incident to successful prosecution of a claim against the principal and the surety for breach of contract. Roberts v. Lawrence, 243 S.C. 158, 161-62, 133 S.E.2d 74, 76 (1963). If, however, the bond does not include a provision for the recovery of attorney’s fees, they cannot be allowed as an element of damage. Standard Oil Co. v. Powell Paving & Contracting Co., 139 S.C. 411, 435, 441, 138 S.E. 184, 191, 193 (1927); Roberts, 243 S.C. at 160, 133 S.E.2d at 75. Applying these principles of South Carolina law, we agree with the district court that the provisions of the bond on which Tomlinson relies are insufficient to allow recovery of attorney’s fees. Tomlinson also contends that he may be awarded attorney’s fees under the rationale of Addy v. Bolton, 257 S.C. 28, 183 S.E.2d 708 (1971). Addy held that an innocent person who incurs attorney’s fees in successfully defending himself against a claim arising out of the third party’s wrongful act is entitled to indemnity from the third party, and his damages include reasonable attorney’s fees incurred in resisting the claim. 257 S.C. 34, 183 S.E.2d at 710. South Carolina limits the indemnity explained in Addy to allowing the recovery of fees incurred by an innocent person in resisting a claim based on the wrongful act of a third party against whom he is entitled to indemnification. JKT Company v. Hardwick, 284 S.C. 10, 325 S.E.2d 329 (App.1984); cf. Rimer v. State Farm Mutual Automobile Insurance Co., 248 S.C. 18, 27, 148 S.E.2d 742, 746 (1966). Tomlin-son has not cited any South Carolina cases which modify this aspect of Addy. Because Tomlinson was the plaintiff in this action against Sentry and its surety for breach of Sentry’s contract, he clearly does not fall within the indemnity exception to the general rule denying attorney’s fees. The judgment of the district court is AFFIRMED.