ISLE OF PALMS — Jimmy Carroll’s waterfront house is just a memory now.
The termites that chewed it up and the companies that were supposed to protect the home are the subject of a lawsuit that’s been spooling out for more than a decade and reached the state Supreme Court this summer.
“I bought it from friends in 2002 and raised my three sons there,” said Carroll, a recent mayor of the barrier island. “It was my dream home on the waterway with dock and pool.”
“After termites were found, I was hoping it wasn’t bad,” he said. "However, the further I went, the worse it was.”
The family moved out, Carroll said, and eventually the house was demolished. The property was later resold.
In 2015, Carroll sued Isle of Palms Pest Control, Inc., successor company SPM Pest Management Company, and Terminex, which purchased some of SPM's assets in 2013. Terminex, which discovered the termite damage in 2014, was later dropped from the lawsuit.
One issue is Carroll’s claim that the termite treatments he contracted for were at some point switched to a different type of treatment without his knowledge.
For at least the past five years courts have wrangled with the question of what sort of claims Carroll could pursue, an argument Carroll’s side lost at every level, until the state Supreme Court took the case.
A key factor at issue is a legal doctrine known as the “economic loss rule” that tends to cause confusion, something Supreme Court Justice D. Garrison Hill broached in the court’s August ruling, saying “anyone who can explain the economic loss rule does not truly understand it.”
Carroll and his lawyer, Jody McKnight, said the ruling is a victory not just for Carroll but for others. Because the court decided he could sue for negligence, it opened the door to damage claims potentially in the millions. The case was then sent back to a lower court.
Charleston School of Law President Constance Anastopoulo, a professor who teaches torts and insurance law, said the Supreme Court did not change the rules involving contract claims versus tort claims that could involve negligence. Rather, it clarified the economic loss rule that lower courts had interpreted differently.
"In the Carroll v. Isle of Palms Pest Control, the Supreme Court ... clarified that the economic loss rule applies only in product liability cases and not to service contracts like pest control," she said.
In product liability cases, the economic loss rule generally limits people from suing for losses beyond the actual damage to the product, so long as it didn’t cause injuries. Product contracts can come into play in such cases, and in Carroll's, a $250,000 damage limit on his termite bond was also at issue — a termite bond being essentially a promise made by pest control companies to pay for damage if they failed to prevent harm from termites.
Pest control companies named in the suit had won in court at every level, seeking to have his negligence claims dismissed in a summary judgment. But with the Supreme Court’s reversal a trial is now scheduled in 2026.
“Right now it’s a question of liability and damages,” said Michael Ethridge, a lawyer representing SPM Pest Management. “We have faith in the process, and the Supreme Court has told us to go back to the trial court.”
A lawyer for Isle of Palms Pest Control declined to comment.
Hill's ruling summarized the ongoing case like this, with the "respondents" being the pest control companies.
"Respondents never kept their promise to maintain the bait stations. Instead, without letting Carroll know, they abandoned the bait station system and began treating his home with a liquid application. There is evidence the application was done negligently," wrote Hill.
"Oblivious to the change in treatment type, Carroll renewed the bait station contract each year. Some ten years later, it was discovered Carroll's home was riddled with termites. Carroll sued Respondents for negligence and breach of contract," he continued.
It was the negligence claim that lower courts had thrown out, before the higher court reversed those decisions.
McKnight, Carroll's lawyer, said: "It is a landmark South Carolina Supreme Court decision that will have far reaching implications not only for this case, but for all contract litigants in our state going forward."