Justia South Carolina Supreme Court Opinion Summaries

In South Carolina, Phillip Francis Luke Hughes, on behalf of the estate of his late mother, Jane Hughes, sued Bank of America for fraud, fraudulent concealment, and breach of contract, alleging that the bank charged insurance premiums in connection with a home equity line of credit his parents obtained in 2006, even though they declined the insurance offer. The bank argued that the claims did not survive Jane Hughes's death, were barred by res judicata and the statute of limitations, and that their motion for sanctions was not premature.The Supreme Court of South Carolina held that the claims for fraud and fraudulent concealment survived Jane Hughes's death. However, it also held that all three claims were barred by the res judicata effect of rulings in related federal court litigation. The court affirmed as modified in part and reversed in part the lower court's decision. The court also affirmed the lower court's decision that the sanctions motion was not premature. The court further held that the claim for breach of contract accompanied by a fraudulent act survived Jane Hughes's death, but was also barred by res judicata.As for the statute of limitations issue, the court held that the statute of limitations had expired before the action was commenced and that the plaintiff was precluded from relitigating the equitable tolling issue. The court remanded Bank of America's sanctions motion to the lower court for disposition. View "Hughes v. Bank of America" on Justia Law

Jimmy and Laura Bailey mortgaged their home in October 2009 to Quicken Loans (first mortgage). A week later, the Baileys entered into an equity line of credit a month later with ArrowPointe Federal Credit Union (the LOC) to the maximum principal amount. The ArrowPointe LOC was secured by a mortgage; ArrowPointe had record notice of the first mortgage. Shortly after taking out the second mortgage, the Baileys refinanced the first mortgage with Quicken in a greater amount than the previous first mortgage. The Baileys executed a “Title Company Client Acknowledgement” at the closing of the refinanced mortgage, which stated the only outstanding lien on the subject property was the first mortgage. There was no clear explanation in the record as to whether Quicken obtained a title examination to ascertain whether there were any outstanding additional liens; Quicken did not ask ArrowPointe to sign a subordination agreement, and ArrowPointe was unaware of the refinance. The Baileys used money from the refinance to pay the first mortgage. Quicken released the first mortgage and recorded the refinance. The Baileys ultimately defaulted on the LOC, and ArrowPointe filed an action to declare its lien had priority over the refinance. US Bank, assignee to the Quicken refinance, argued it was entitled to priority under the replacement mortgage doctrine. ArrowPointe argued it was entitled to priority because Quicken had record notice of its LOC at the time of refinancing. A referee concluded South Carolina did not recognize the replacement mortgage doctrine, and because there was no subordination agreement, ArrowPointe had priority under the race-notice statute. The referee ordered foreclosure and sale of the subject property. Finding no reversible error in the referee’s order, the South Carolina Supreme Court affirmed. View "ArrowPointe Federal Credit Union v. Bailey" on Justia Law

In October of 2007, Petitioner Otha Delaney bought a 2003 Chevrolet pick-up truck from Coliseum Motors pursuant to a retail installment sales contract. The dealership subsequently assigned the contract to Respondent First Financial of Charleston, Inc., which acquired a security interest under the UCC. After Delaney failed to make payments, First Financial lawfully repossessed the truck, and on May 2, 2008, it sent Delaney a letter entitled, "Notice of Private Sale of Collateral." Over seven months later, on December 15, 2008, First Financial sold the truck. On October 3, 2011, more than three years after sending notice but less than three years from the sale of the truck, Delaney filed suit against First Financial, seeking to represent a class of individuals who had received notice that allegedly failed to comply with certain requirements in Article 9. After a hearing, the trial court found: (1) the remedy Delaney sought pursuant to section 36-9-625(c)(2) South Carolina Code (2003) was a statutory penalty; (2) the six-year Article 2 limitations period did not apply because Delaney failed to plead breach of contract, the claim solely concerned deficient notice under Article 9, and even if Article 2 applied, the more specific limitations period on penalties governed; and (3) under either limitation period, Delaney's claim was time-barred as his action accrued upon receipt of the allegedly deficient notice. To this last point, the South Carolina Supreme Court determined the trial court erred, holding the notice of disposition of collateral did not accrue until First Financial disposed of the collateral. Accordingly, because Delaney filed this action within three years from that date, the matter was remanded for further proceedings. View "Delaney v. First Financial" on Justia Law

This appeal arose out of a $17 million verdict rendered in favor of Francis Maybank for claims sounding in contract, tort, and the South Carolina Unfair Trade Practices Act (UTPA). Maybank brought this action alleging he received faulty investment advice from Branch Banking and Trust (BB&T - the Bank) through BB&T Wealth Management (Wealth Management) and BB&T Asset Management (Asset Management), all operating under the corporate umbrella of BB&T Corporation (collectively, Appellants). Appellants appealed on numerous grounds, and Maybank appealed the trial court's denial of prejudgment interest. After review, the Supreme Court reversed as to an award of punitive damages based on a limitation of liability clause. The Court affirmed on all other grounds. View "Maybank v. BB&T" on Justia Law

Latoya Brown purchased a Mazda 6 from Dick Smith Nissan, Inc. through the dealer's salesman, Robert Hiller. The purchase was contingent on acquiring third-party financing. Due to continuing and unresolved issues with financing, Brown returned the vehicle to Dick Smith. The car was later repossessed and sold by Sovereign Bank with a deficiency against Brown. Brown filed a complaint against Dick Smith and Old Republic Surety Company, the surety on Dick Smith's licensing bond, alleging violations of the South Carolina Dealers Act. The trial judge, in a bench trial, found in favor of Brown and awarded damages plus interest as well as attorney's fees and costs. Dick Smith and Old Republic appealed and the Court of Appeals reversed, concluding that any misconceptions that Brown had about her financing were caused by Sovereign Bank, not Dick Smith. Despite evidence in the record to support the trial judge's findings of fact, the Court of Appeals ignored those findings and substituted its own. By doing so, the Court of Appeals exceeded its standard of review. Accordingly, the Supreme Court reversed the Court of Appeals and reinstated the trial judge's decision. View "Brown v. Dick Smith Nissan" on Justia Law

In 2003, Marie Borchers purchased the home at the heart of this controversy from Cammie Strawn. Cammie acquired the home, by deed, from her then-husband, Richard Strawn. Richard Strawn had previously given a mortgage to Regions Bank to secure a line of credit. At the time that the house was sold to Marie Borchers, there was an outstanding balance. On the day of closing, Marie Borchers' attorney had an employee deliver a payoff check and a mortgage satisfaction transmittal letter to Regions Bank. The check had the words "Payoff of first mortgage" typed on it. Regions Bank applied the check to the line of credit debt bringing its balance to zero; however, Regions Bank did not satisfy the mortgage. Instead, Regions Bank provided Richard Strawn with new checks on the line of credit even though the public record reflected that Richard Strawn had not owned the property for more than two years. Richard Strawn accrued new debt in excess of $72,000. Regions Bank attempted to collect Strawn's debt by foreclosing on the Borchers' home. The Borchers counterclaimed seeking to recover damages from Regions Bank pursuant to section 29-3-320 of the South Carolina Code based on the bank's failure to enter satisfaction of the mortgage within the three-month time period required by section 29-3-310. The trial court granted the Borchers' motion. Citing admissions from Regions Bank employees, the trial court concluded that based on "these admissions by the Bank it is clear that the closing day payoff should have been processed as a payoff instead of a paydown and that the bank should have had the mortgage satisfied of record." Additionally, the court specifically cited section 29-3-320 and its imposition of liability for mortgage lenders that do not satisfy mortgages within three months after payoff. Regions Bank appealed, and the Court of Appeals affirmed. Finding no reversible error, the Supreme Court also affirmed. View "Regions Bank v. Strawn" on Justia Law

BADD, L.L.C. purchased three warehouse units in Myrtle Beach. To finance the transaction, BADD executed two promissory notes. A personal guaranty was also executed by William McKown, who was a member of BADD. After BADD defaulted, the Bank brought this foreclosure action and included McKown as a party based on his status as a guarantor. In McKown's amended answer and counterclaim, he demanded a jury trial because the Bank sought a money judgment for the breach of a guaranty arrangement. McKown further sought an accounting and a determination that the guaranty agreement was unconscionable. McKown then asserted two counterclaims: (1) civil conspiracy and (2) breach of contract, both based on an alleged conspiracy between the Bank and William Rempher. Finally, McKown asserted third-party claims against Rempher. The Bank moved for an order of reference. The circuit granted the motion, referring the matter in its entirety to the master-in-equity. The Court of Appeals reversed, holding McKown was entitled to a jury trial because the Bank's claim on the guaranty agreement was a separate and distinct legal claim. The Bank appealed, challenging the Court of Appeals' finding that McKown was entitled to a jury trial. The Supreme Court reversed, finding that McKown was not entitled to a jury trial solely because the Bank exercised its statutory right to join him as a party in the event of a deficiency judgment. Furthermore, the Court held McKown was not entitled to a jury trial based on his counterclaims, which, while legal, were permissive. McKown waived his right to a jury trial by asserting permissive counterclaims in an equitable action. View "Carolina First Bank v. BADD, L.L.C." on Justia Law

In a consolidated appeal, the plaintiffs from four separate actions (collectively, Appellants) ask the Supreme Court to reverse the trial court's order granting a motion to dismiss in favor of respondents Branch Banking & Trust Company (BB&T) and BB&T employee James Edahl. Skywaves I Corporation (Skywaves) was a South Carolina corporation that develops technology for the wireless telecommunications industry. In 2005, Skywaves entered into a factoring agreement with BB&T. From 2005 to 2007, Skywaves and BB&T occasionally amended the agreement via written modifications so that BB&T could fund Skywaves's working capital needs as those needs developed and expanded. In early 2007, Skywaves won several lucrative government contracts, and its Board of Directors determined that the company required more capital than BB&T provided at that time in order to meet the increased demand for their products. Skywaves therefore solicited funding proposals from various entities, including Wachovia, Hunt Capital, and BB&T. In July 2007, Edahl made a presentation to Appellants, each of whom was a director, officer, or shareholder in Skywaves, in addition to a current or potential investor in Skywaves. During the presentation, Edahl told Appellants that BB&T believed that Skywaves would continue to develop and expand into new markets, that BB&T "was fully committed to providing all of Skywaves['s] short-term and long-term financial needs for growth," and that BB&T would honor the new factoring agreement between itself and Skywaves. Appellants alleged that they each relied on these statements and were induced to "invest[] in the growth" of Skywaves via purchasing equity positions and making loans to Skywaves. BB&T funded Skywaves in accordance with the new factoring agreement from March 2007 until January 2008. In January 2008, BB&T asserted that Skywaves had defaulted under the terms of the factoring agreement, and BB&T refused to honor any further financial commitments in accordance with the contract. In the absence of funding, Skywaves filed for bankruptcy. As a result of the bankruptcy proceedings, Appellants lost their equity investments in Skywaves. Skywaves and Appellants therefore filed separate lawsuits against Respondents—Skywaves on its own behalf, and Appellants in their capacity as investors and employees of Skywaves. The trial court granted the motions to dismiss, finding all of Appellants' claims were barred for various reasons. The Supreme Court concluded that while Skywaves might be able to show that, as a BB&T customer, the bank owed the corporation a duty, Appellants were not BB&T's customers and therefore were not owed a similar duty. Accordingly, the Court affirmed the trial court's ruling that Respondents were entitled to judgment as a matter of law as to all of Appellants' claims. View "Kerr v. BB&T" on Justia Law

Petitioners' properties were in danger of foreclosure. Prior to any foreclosure action, Petitioners obtained loan modifications from their respective lenders to extend their loans' maturity dates and receive additional time to pay. Petitioners were unable to keep up with payments under the modification, and sought to prevent foreclosure arguing that the lenders engaged in the unauthorized practice of law by modifying the loans without an attorney. The Supreme Court disagreed, finding that modifying the loans without attorneys was not the unauthorized practice of law. View "Crawford v. Central Mortgage" on Justia Law

The Savannah Bank, N.A., (Bank) sought to foreclose on a property owned by Appellant Alphonse Stalliard. Appellant argued that he should not be held liable for a loan closed by a person acting on his behalf under a power of attorney. Appellant alleged, inter alia, that Bank did not conduct reasonable due diligence and did not verify Appellant's ability to pay. He filed a motion seeking additional time for discovery. The master-in-equity denied the motion and ruled in Bank's favor. Appellant appealed that decision, arguing that summary judgment was improper and that the master should have permitted additional time for discovery. Upon review, the Supreme Court held that the master properly denied Appellant's motion. View "Savannah Bank v. Stalliard" on Justia Law