On December 9 your Home Builders Association invited past presidents of the association to lunch at the Commerce Club, sponsored by Gallivan, White, and Boyd. There were lots of stories and plenty of advice for 2014 HBA President Mike Freeman of ACA/Freewood Contracting. The group also welcomed current president Rick Quinn of Quinn Satterfield to their club.
Thank you for your service and dedication to our association and the industry, this is an event that we will look forward to next year!
Here is the list of Past Presidents, those in attendance are denoted by *.
1960 and 1961 Donald Baltz
1962 Edgar Teasley
1963 John Taylor, Jr.
1964 M. Graham Proffitt *
1965 Marion Uldrick
1966 Eugene Rackley
1967 Lloyd W. Gilstrap
1968 Edward H. Hembree
1969 W. N. Leslie
1970 Larry Gibson
1971 Levis Gilstrap
1972 John Cothran *
1973 Harold Newton
1974 Ray Dempsey
1975 J. W. Roberts *
1976 James Vaughn
1977 W. Glenn Hawkins
1978 David Balentine
1979 A. James Nelson
1980 A.J. Prince *
1981 Ralph Hendricks
1982 David Douglas
1983 Wm. H. McCauley
1984 Bobby Sexton *
1985 Don Franklin
1986 Dee Smith
1987 Jerry Marsh
1988 James Leary
1989 Ed Burgess
1990 Joe W. Jelks, III
1991 Don Rex
1992 Dennis Waldrop
1993 Lynn Yeargin
1994 Rodney Edwards
1995 Doug Ashmore
1996 William (Billy) Dunn *
1997 Tim Justice
1998 and 1999 Gale Crawford
2000 Wayne Moore *
2001 Richard Merritt *
2002 Jim Gregorie
2003 Keith Smith *
2004 Hal Dillard *
2005 Clyde Rector
2006 Coleman Shouse *
2007 Dan Rawls *
2008 Todd Usher
2009 Bruce Pasquarella *
2010 Thomas Dillard
2011 Wayne Moore *
2012 Robert Markel *
2013 Rick Quinn *
The cost of a bad hire and how to avoid it is the title of an article this week by Stephanie Klein in the Denver Business Journal. In the article, Klein discusses the importance of a well-craft hiring process. “Hiring the wrong person can cost your business thousands of dollars and have ramifications that echo far beyond that single bad hire,” Klein writes.
Read the complete article by Stephanie Klein in the Denver Business Journal by clicking here.
Your HBA of Greenville is planning an Education Forum that will help you understand the importance of recruiting and managing a successful team of employees.
The next Education Forum is Wednesday, June 6, 11:30 a.m., at Hubbell Lighting Headquarters.
- Topic: Human Resources: Recruitment, Management, and Diversity
- Speakers: Lawanna Dendy, PHR, GBS Building Supply, and Carrie Scott, SPHR, Find Great People
- Sponsors: GBS Building Supply and Progress Lighting
By Ron G. Tate, Esq.
Gallivan, White & Boyd, P.A.
The owners of many building companies choose to organize their business as Limited Liability Companies LLC). Many home builders organize as an LLC to avoid potential personal liability in civil actions. They were taking advantage of what seemed on the surface to be a clearly worded statute that insulates individual LLC members from civil liability for wrongful acts, called torts, such as negligent construction.
Supreme Court Decision Changes the Protection of an LLC
The South Carolina Supreme Court’s April 4, 2012, opinion in 16 Jade Street, LLC v. R. Design Construction Co., LLC calls into question the “limited liability” nature of the LLC business entity. In that case, the court held that the Limited Liability Company Act (Act) does not shield an LLC member from liability for his own torts, but rather protects only those members who did not directly commit wrongful acts, from vicarious liability.
In this case, Carl Aten and his wife were the sole members of R. Design Construction Co., LLC (R. Design), a South Carolina LLC, acting as general contractor for a construction project in Beaufort, South Carolina. After defects were discovered and one subcontractor left the project over a payment dispute, the construction ground to a halt. R. Design abandoned the project, never replacing the subcontractor nor adequately addressing more than sixty defects. At trial, the court awarded the plaintiff $925,556 in damages, finding R. Design and the subcontractor liable, as well as finding Aten personally liable for negligence. On appeal, the South Carolina Supreme Court concluded that the Act does not shield a member of an LLC from liability for his own torts. Rather, the Act protects only non-tortfeasor members of an LLC from vicarious liability. For example, Aten’s wife is shielded from liability because she was not found to be personally negligent.
About the LLC Act
The statute, § 33-44-303 of the South Carolina Code, provides that the liabilities of the LLC are solely the liabilities of the company, and a member or manager is not personally liable for them solely by reason of being a member or manager. In examining the plain language of the statute, the court acknowledged that it suggests a member is shielded from individual liability from torts committed in furtherance of the LLC. After all, as the court acknowledged, § 33-44-303(a) provides that obligations arising in tort are “solely” those of the company. A footnote further strengthens the argument against the court’s ultimate conclusion in pointing out that because § 33-44-303(c) expressly provides how a member can become personally liable, “it therefore stands to reason that the general rule is he is not otherwise personally liable.” (Emphasis added)
What the Court Said
Nevertheless, the court reasoned that the “right to sue one’s tortfeasor” is a “long-standing right” in our legal system, which will only be abrogated by statute through clear legislative intent. While the court agreed that “the language of the LLC act appears to insulate a member from personal liability,” it ultimately held that “such a sweeping liability shield was not intended by the General Assembly.”
The court also drew a parallel between LLCs and corporations noting that a shareholder of a corporation is not personally liable for the acts of the corporation except that he may become personally liable by reason of his own acts or conduct. Therefore, the impact of the decision is that business owners may not insulate themselves from personal liability for their own torts by organizing as either a corporation or an LLC.
The court certainly recognized the impact of its decision would be particularly acute in the case of a single member LLC. Because “one cannot be vicariously liable for his own actions,” there simply is no one to protect in the case of a single member LLC. Moreover, where the LLC member is a license holder who is required to be in charge of the work, this case raises a question of whether he or she may ever escape personal liability.
The court’s suggestion that the legislature could clarify the intent of the Act has already been taken: Senator Larry Martin has introduced a Joint Resolution of the General Assembly that the “clear and unambiguous intent of the… limited liability act was… to shield a member of an LLC from personal liability for actions taken in the ordinary course of business of the LLC.”
What You Need to do to Protect Yourself and Your Assets
So what does all this mean for you? Perhaps the proposed Joint Resolution will persuade the court that individuals in future cases should not be personally liable where they conduct business under an LLC. Until this issue is resolved by the legislature and the courts, many uncertainties remain. The best practical advice is to look closely at your company’s liability insurance coverages. Talk with your insurance agent or broker about your business risks and make sure that you have appropriate insurance policies that cover you and your activities at adequate coverage limits. Careful analysis of your insurance program is especially important for builders, because liability insurance coverage for construction defects is frequently the subject of litigation. Finally, talk with your legal advisor about how you may protect your individual assets in light of this decision.
The Home Builders Association of Greenville is hosting a Lead Paint Seminar presented by the Environmental Protection Agency on Thursday, September 29, 3 p.m., at the TD Convention Center.
The seminar is open to the entire home improvement industry compliments of the Home Builders Association of Greenville.
The seminar will feature speakers on the various aspects of the new lead paint rule. EPA is beginning to step up its enforcement of the lead paint rule, so it is important for the home improvement industry to understand and comply with the rule.
- 3:00-3:30 What is Abatement?: Lead Abatement Training Components, Greenville Technical College, Joy Finch
- 3:30-3:50 Statistics: South Carolina Health Department Childhood Lead Poisoning Prevention Program, M.L. Tanner
- 3:50-4:10 Legal implications of not complying, Childs Thrasher, of Gallivan White and Boyd
- 4:20-4:40 Are You Insured? (Insurance options available, costs and coverage), Palmetto Insurance, Howard Cox
- 4:40-5:10 Proper use of Lead Testing Equipment Lead Check, W. Jonson
- 5:10-5:40 Renovation and Repair Painting Rule, EPA Region 4, Andrea Lippitt
- 5:40-6:00 Questions and Answers
Following the seminar participants will receive a complimentary ticket to Big Thursday, the preview party for the Southern Home and Garden Show held on the show floor in the TD Convention Center.
The annual Chili Cook Off and Oyster Roast helped raised needed money for S.C. Builders PAC this week.
Partners who helped make the Chili Cook Off possible include:
- Presenting Partners
- Dillard Jones Builders
- Clark’s Services
- GBS Building Supply
- Keith Smith Builders
- Gallivan, White & Boyd
- Michael and Karen Dey
More than 60 members and guests judged the annual chili cook off contest, played the game “corn hole,” and enjoyed steamed oysters prepared by Clark’s Services.
Special thank you to Deana Long of Carter Lumber Company, who raised $100 selling tickets for the PAC 50/50 Raffle.
This year’s event was held in the Atrium and on the patio at the TD Convention Center.
S.C. Builders PAC is a cooperative Political Action Committee managed by the Home Builders Association of South Carolina. Local HBAs throughout South Carolina raise funds for the PAC. PAC funds are used to support candidates for public office who support housing and home building. PAC contributions are voluntary. The association’s Legislative Committee screens candidates for office and recommends contributions to the association’s Board of Directors. Candidates for statewide office are further screened by a Board of Trustees made up of representatives from each of the local HBAs across the state.