Smoketree-Lake Murray, Ltd. v. Mills Concrete Construction Co.

Smoketree-Lake Murray, Ltd., Brehm Construction Company and Forrest W. Brehm (hereafter Developer) appeal a judgment on a cross-claim for indemnification. On appeal, Developer contends the judgment must be reversed because the trial court erred in ruling a fraud finding barred indemnification and failing to find the jury committed misconduct. We reverse.

Facts

In 1985, the Smoketree-Lake Murray Owners’ Association, Inc., sued Developer and others for damage to their condominium complex. These damages manifested themselves as cracks in walls and slabs, doors which would not close properly, patios which pulled away from buildings and cracks causing leaks in the complex’s swimming pool. Developer eventually settled with the Association for over $3 million.

Developer cross-complained for indemnification against various subcontractors including Calego Excavating Company (Calego), which performed the grading work, and Mills Concrete Construction Company, Inc. (Mills), which did the concrete work. In defense, Mills and Calego contended Developer’s fraud, in making misrepresentations and concealing information from the condominium purchasers, barred Developer from obtaining…