Montgomery Holdings, LLC v. Christopher J. Merlo

CourtCourt of Appeals of South Carolina
DecidedFebruary 11, 2026
Docket2022-001189
StatusPublished

This text of Montgomery Holdings, LLC v. Christopher J. Merlo (Montgomery Holdings, LLC v. Christopher J. Merlo) is published on Counsel Stack Legal Research, covering Court of Appeals of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montgomery Holdings, LLC v. Christopher J. Merlo, (S.C. Ct. App. 2026).

Opinion

THE STATE OF SOUTH CAROLINA In The Court of Appeals

Montgomery Holdings, LLC d/b/a IBI Builders, Respondent,

v.

Christopher J. Merlo and Grandsouth Bank, Defendants.

and

Christopher J. Merlo, Appellant,

Gregory K. Grissinger, Jr. and John Montgomery, Respondents.

Appellate Case No. 2022-001189

Appeal From Oconee County Steven C. Kirven, Master-in-Equity

Opinion No. 6135 Heard September 10, 2025 – Filed February 11, 2026

AFFIRMED

Townes Boyd Johnson, III, of Townes B. Johnson III, LLC, of Greenville, for Appellant.

Jason M. Tarokh, of Tampa, Florida, for Respondents. KONDUROS, J.: This is a consolidated foreclosure/breach of contract action arising out of the contract between Montgomery Holdings, LLC d/b/a IBI Builders (IBI) and Christopher J. Merlo for the construction of Merlo's custom home at Lake Keowee. Merlo terminated the construction contract on October 12, 2019, while still owing $255,534.86 according to IBI's balance sheet for the project. IBI filed a mechanic's lien and foreclosure action and a breach of contract claim. Merlo counterclaimed and also brought suit against Gregory K. Grissinger, Jr. (Grissinger) and John Montgomery (Montgomery), the primary members of IBI, individually. After a bench trial, the master-in-equity awarded a $402,861.66 verdict in favor of IBI and ordered the sale of the property. Merlo appeals, and we affirm.

FACTS/PROCEDURAL HISTORY

IBI and Merlo entered into a written contract dated November 17, 2017 (the Contract), for the construction of a custom home on Merlo's real property for the base price of $625,000 plus any change orders (to be paid as they occurred) and allowance overages. The contract provided IBI would build the house "per plans and scope" and be solely responsible for "construction means, methods, techniques, sequences, and procedures, and for coordinating all portions of the work under the contract." Merlo provided a plan for the home, the "Sandy Creek," a Donald Gardner home plan available for purchase by the public. The plan was modified to some extent based on the terrain of Merlo's lot and based on Merlo's requested changes.

The project proceeded over the next two years with some problematic issues along the way that seemed to be resolved through communication between the parties.1 Merlo provided "re-work" lists to IBI and the parties would consult and attempt to resolve them. In May of 2019, Merlo requested he be allowed to add any change order costs to the balance sheet with the understanding he was obtaining a home equity line of credit (HELOC) to cover these additional costs. In exchange for agreeing to this plan, IBI obtained a guaranty from Merlo. The Guaranty provided that Merlo agreed the balance sheet as of April 30, 2019, consisted of a total balance owed to IBI in the amount of $183,382, agreed to pay IBI for all past and pending change orders reflected on the April 30, 2019 balance sheet, and that all future change orders and allowance overages would be added to the balance sheet.

1 The Contract provided that inclement weather, delays in decision-making by the owners, and plan changes would add to the estimated construction time of twelve months. The guaranty also provided that full payment of these obligations would be made prior to "move in completion of home and or Certificate of Occupancy request." Merlo also specifically waived the defense of lack of consideration and other defenses.

GrandSouth Bank held the construction loan that primarily funded the project, and Lee Matthew West III had performed construction loan draw inspections for the Merlo project on GrandSouth's behalf. West inspected the Merlo project on August 26, 2019, and found that it was 93% complete. As the construction was drawing to a close, on October 11, IBI notified Merlo it was preparing to request a Certificate of Occupancy and requested payment for the outstanding balance sheet items. However, Merlo indicated his securing the needed money was contingent upon receiving a certificate of occupancy and was through an online lender as opposed to GrandSouth. Montgomery suggested a meeting with Merlo to resolve the issue, but Merlo indicated he was not available. IBI had just received the appliances for installation and was prepared to continue with finalizing the project. The following day, Merlo terminated his contract with IBI via email stating,

After careful consideration, I decided to terminate my contract with IBI Builders effective immediately. The contract began November 16th, 2017[,] and 695 days have passed, 2 years to build a 4,000 square foot house. It remains unfinished & the re-work required is extensive. I cannot in good conscience devote another year of my life to this partnership.

IBI filed a mechanic's lien against the property for the outstanding amounts due. On November 8, 2019, IBI filed a complaint alleging foreclosure of its mechanic's lien, breach of contract, unjust enrichment, and quantum meruit. IBI also named Bank of Travelers Rest and GrandSouth as defendants to the foreclosure claim. Merlo filed his answer and counterclaim and a third-party complaint against Montgomery and Grissinger. The counterclaim alleged breach of contract, negligence, negligence misrepresentation, fraud, violation of the South Carolina Unfair Trade Practices Act (SCUTPA), and breach of fiduciary duty against IBI. The third-party complaint alleged those same claims against Grissinger and Montgomery except for breach of contract. The circuit court ultimately consolidated the actions, and they were referred to the master.

The master conducted a four-day bench trial. At the conclusion of evidence, Merlo moved for directed verdict on all his claims. The master denied his motion. The master granted a directed verdict in favor of IBI, Grissinger, and Montgomery as to Merlo's claims of negligence, negligent misrepresentation, fraud, SCUTPA violation, and breach of fiduciary duty. The master also granted a directed verdict as to Merlo's negligence claim against Grissinger and Montgomery in their individual capacities. The master rendered a judgment in favor of IBI on its breach of contract and mechanic's lien foreclosure claims, finding Merlo had unjustifiably breached the Contract first and that IBI had substantially performed its obligations under the Contract. He further found Merlo had failed to prove his breach of contract claim because testimony of Montgomery, Grissinger, and their expert indicated IBI had performed the construction of the home in a good and workmanlike manner. The master further indicated he found Merlo was not credible in his testimony. He found the total debt due to IBI was $402,861.66, which included the amount claimed by IBI, prejudgment interest, and attorney's fees. The master ordered the subject real property be sold to satisfy the indebtedness owed to IBI and dismissed the additional claims of both parties. On July 28, 2022, the Oconee County Clerk of Court filed a notice of sale, which scheduled a foreclosure sale of the subject real property for September 6, 2022. Merlo filed a motion to alter or amend, which was denied, and then filed a notice of appeal.

Subsequently, on August 29, 2022, while this appeal was pending, IBI filed a satisfaction of judgment, which provided the judgment against Merlo "has been satisfied in full as to all damages, costs, and charges." In response IBI filed a motion and order canceling the foreclosure sale scheduled for September 6, 2022. We now consider Merlo's appeal.

LAW/ANALYSIS

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Bluebook (online)
Montgomery Holdings, LLC v. Christopher J. Merlo, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montgomery-holdings-llc-v-christopher-j-merlo-scctapp-2026.