Articles Posted in Commercial Law

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The Supreme Court granted a petition for a writ of certiorari to review the decision of the Court of Appeals in "Rider v. Estate of Rider," (713 S.E.2d 643 (Ct. App. 2011)), which applied the common law of agency to hold that certain financial assets were part of the decedent's probate estate. The decedent had directed his bank to transfer specified assets in his investment account to a new account for his spouse, but died before all of the assets were credited to the account. The issue in this case was one of first impression for the Supreme Court, and after review of the facts, the Court reversed the appellate court: "[o]nce Husband issued the entitlement order and was the appropriate person, Wachovia was obligated by the UCC and the parties' Account Agreement to obey his directive. Wachovia had set up a new investment account in Wife's name and commenced the transfer of securities within a few days of Husband's request, so at that point, Wife already had a recognizable interest, even though Wachovia had not posted all of the securities to her account. The Court of Appeals, in focusing solely on the date of the 'book entry,' which it took to mean the date the securities were credited or posted to Wife's account, seemed to view this as the exclusive means for obtaining an interest in the securities." View "In the Matter of Charles Rider" on Justia Law

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Respondent Atlantic Coast Builders and Contractors, LLC brought an action against its landlord, Petitioner Laura Lewis, for negligent misrepresentation, unjust enrichment, and breach of contract.  Atlantic also sought a return of the security deposit it paid pursuant to its lease with Lewis.  The master-in-equity entered judgment in favor of Atlantic, and the court of appeals affirmed. The landlord appealed, arguing the appellate court erred in its return of the security deposit and in calculating its damages award. Upon review, the Supreme Court found that the court of appeals erred in concluding the issue regarding the security deposit was preserved for review. Because the deposit issue was not preserved, the landlord was entitled to retain the deposit. Consequently, Atlantic's damages were reduced by $3500. The Court affirmed the appellate court as to the entry of judgment against the landlord for negligent misrepresentation and unjust enrichment. View "Atlantic Coast Builders and Contractors v. Lewis" on Justia Law

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Appellant Stivers Automotive of Lexington, Inc. (Stivers) and Respondent South Carolina Federal Credit Union (SCFCU) were parties to a Dealer Agreement (Agreement), under which SCFCU agreed to purchase sales contracts between Stivers and purchasers of its vehicles. Among other provisions in the Agreement, Stivers warranted certain representations made in connection to its sales contracts assigned to SCFCU. Hiram Riley (Riley) sought to purchase a vehicle from Stivers but was unable to qualify for financing. Stivers' salesman, Tom Roper (Roper), indicated that Riley could get the car if he found a co-signer. Riley contacted his sister, Mildred Higgins (Higgins), who agreed to co-sign for the car. Roper then visited Higgins at her home to sign the appropriate paperwork. After Roper thoroughly explained the documents, Higgins indicated she understood and signed the paperwork. As it turned out, the paperwork was drafted so that Higgins was the sole purchaser of the car, not a co-signer. Ultimately, SCFCU approved the loan to Higgins for the purchase price. Riley picked up the vehicle, with the understanding that he was to make the payments. Riley eventually stopped making payments on the car, stopped driving it, and told SCFCU where it could recover the car. SCFCU hired an agent to repossess the vehicle. SCFCU filed a complaint against Higgins, given that her name was on the loan. Higgins denied the allegations in the complaint, stating that she was incompetent at the time of the execution of the contract. Subsequently, SCFCU amended its complaint, alleging Stivers breached the Agreement. The trial court granted SCFCU's motion for a directed verdict against Stivers, finding Higgins lacked capacity to contract and Stivers breached the Agreement in that regard. The court also held that Stivers breached all contract warranties. Upon review, the Supreme Court found that the trial court erred by directing a verdict against Stivers on the issue of capacity. Additionally, the Court held that the trial court erred in granting a directed verdict to SCFCU as to the other warranties contained in the contract, as well as the amount of damages due SCFCU. View "South Carolina Federal Credit Union v. Higgins" on Justia Law

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Appellant Matthew Kundinger received a default judgment against Louis and Linda Frazer (the Frazers) before the Frazers closed a refinance mortgage with Matrix Financial Services Corporation (Matrix).  In Matrix's foreclosure action, the master-in-equity granted Matrix equitable subrogation, giving the refinance mortgage priority over Appellant's judgment lien. Appellant counterclaimed, alleging his judgment had priority over Matrix's mortgage because it had been recorded first.  Matrix, attempting to gain the primary priority position, then sought to have the refinance mortgage equitably subrogated to the rights of its January 2001 mortgage.  The master-in-equity granted Matrix's request, and Appellant appealed that order. Upon review of the applicable legal authority, the Supreme Court found that a lender that refinances its own debt is not entitled to equitable subrogation.  The Court reversed the lower court's decision and remanded the case for further proceedings. View "Matrix Financial Services Corp. v. Frazer" on Justia Law