Articles Posted in South Carolina Supreme Court

by
The South Carolina Supreme Court answered two certified questions of South Carolina law, posed by the U.S. District Court for the District of South Carolina. These questions arose from two sets of litigation (“Fullbright” and “Chenard”) at the federal district court involving individuals (collectively, Plaintiffs) who entered into contracts with developers (collectively, Defendants) to purchase interests in vacation time sharing plans (timeshare plans) for real estate on Hilton Head Island. The federal court asked the Supreme Court whether: (1) the South Carolina Real Estate Commission had exclusive jurisdiction to determine whether there was a violation of the state Vacation Time Sharing Plans Act; (2) whether the Commission’s determination of a violation of the Timeshare Act was a condition precedent to a purchaser suing to enforce the Act; and (3) whether the Commission’s determinations as to whether the Timeshare Act was violated was binding on courts. The Supreme Court answered the first two questions in the negative; the Court answered the third question “no” too, provided the Commission’s decision had not bee subjected to judicial review. View "Fullbright v. Spinnaker Resorts" on Justia Law

by
The Riverwalk at Arrowhead Country Club and Magnolia North Horizontal Property Regime developments were constructed between 1997 and 2000. After construction was complete and the units were sold, the purchasers became aware of significant construction problems, including building code violations, structural deficiencies, and significant water-intrusion problems. In 2003, the purchasers filed suit to recover damages for necessary repairs to their homes. Lawsuits were filed by the respective property owners' associations (POAs), which sought actual and punitive damages for the extensive construction defects under theories of negligent construction, breach of fiduciary duty, and breach of warranty. As to the Riverwalk development, individual homeowners also filed a class action to recover damages for the loss of use of their property during the repair period. The defendants in the underlying suits were the related corporate entities that developed and constructed the condominium complexes: Heritage Communities, Inc. (the parent development company), Heritage Magnolia North, Inc. and Heritage Riverwalk, Inc. (the project-specific subsidiary companies for each separate development), and Buildstar Corporation (the general contracting subsidiary that oversaw construction of all Heritage development projects), referred to collectively as "Heritage." The issues presented to the Supreme Court by these cases came from cross-appeals of declaratory judgment actions to determine coverage under Commercial General Liability (CGL) insurance policies issued by Harleysville Group Insurance. The cases arose from separate actions, but were addressed in a single opinion because they involved virtually identical issues regarding insurance coverage for damages. The Special Referee found coverage under the policies was triggered and calculated Harleysville's pro rata portion of the progressive damages based on its time on the risk. After review of the arguments on appeal, the Supreme Court affirmed the findings of the Special Referee in the Magnolia North matter, and affirmed as modified in the Riverwalk matter. View "Harleysville Group Ins. v. Heritage Communities, Inc." on Justia Law

by
In 2003, petitioner Roosevelt Simmons acquired title to two parcels of land, "Tract 498" and "Tract 135." Both parcels were undeveloped, wooded, and located along Kitford Road on Johns Island. The parcels were separated by an abandoned railroad right-of-way and were previously part of a larger tract owned by two of Simmons' predecessors-in-title, Edward Heyward and E.C. Brown. In 1956, Heyward granted an easement to Berkeley Electric to construct and maintain transmission lines over Tract 498 and Tract 135. In 1972, Brown granted an easement to Berkeley Electric to construct and maintain distribution lines over Tract 498. In 1977, Charleston County issued an encroachment permit authorizing St. John's Water to install a water main along Kitford Road pursuant to an accompanying map that illustrated the water main's approved location. In 2005, Simmons discovered a water meter under bushes on Tract 135. Simmons subsequently contacted St. John's Water, which informed Simmons that it would not move the water main because it believed it had an easement giving it the right to use the property. St. John's Water based its belief on the encroachment permit and its understanding that the water main had been in its current location for more than twenty years. Pursuant to a request by Simmons, St. John's Water "blue-flagged" the property. The blue flags showed the water main crossing both Tract 135 and Tract 498. In 2008, Simmons commenced this action against Berkeley Electric and St. John's Water alleging trespass and unjust enrichment. Specifically, Simmons alleged Berkeley Electric and St. John's Water trespassed on his property by constructing, placing, and maintaining unauthorized power and water lines. In doing so, Simmons claimed Berkeley Electric and St. John's Water had been "furnished with a non-gratuitous and valuable benefit without paying for its reasonable value." Simmons also sought a declaration that neither utility company had property interests or rights to his property. The Court of Appeals affirmed the master's grant of summary judgment in favor of Berkeley Electric, finding Berkeley Electric did not exceed the scope of the express easements. After review, the South Carolina Supreme Court affirmed judgment in favor of Berkeley Electric, but reversed the portion of the Court of Appeals' decision that upheld the master's grant of summary judgment in favor of St. John's Water. The case was remanded for additional proceedings. View "Simmons v. Berkeley Electric Cooperative, Inc." on Justia Law

by
Jimmy Johnson fled from police after being stopped for having an expired vehicle license. Armed, Johnson went to a Carolina Convenience Store in Spartanburg, where he took Saroj Patel hostage. The City's police department negotiated with Johnson in an effort to encourage Johnson to surrender. After the negotiations were unsuccessful, the police department cut off the power to the store and sent tear gas and pepper spray into the building's ventilation system in another attempt to induce surrender. After a twelve-hour standoff, the police decided to breach the building with a bulldozer, which resulted in severe physical damage to the property. Given the condition of the store, the City asked Carolina Convenience to tear it down for code violations. After Carolina Convenience refused, the City demolished the building. Carolina Convenience then brought claims for inverse condemnation and negligence against the City for damages to the store. The circuit court granted the City's summary judgment motion as to the inverse condemnation claim, but denied it as to the negligence claim. The jury returned a verdict in the City's favor as to the negligence claim. The store appealed only the inverse condemnation ruling, but the court of appeals affirmed, finding the circuit court properly granted summary judgment as to the inverse condemnation claim. Finding that the Court of Appeals erred in its analysis of the takings claim, the South Carolina Supreme Court simply held that damage to the property during the police department’s hostage rescue effort did not constitute a taking as contemplated by the State Constitution. The Supreme Court affirmed the Court of Appeals’ decision as modified. View "Carolina Convenience Stores v. City of Spartanburg" on Justia Law

by
The South Carolina Supreme Court granted certiorari to review a Court of Appeals' decision affirming a circuit court order denying petitioner's John Wieland Homes and Neighborhoods of the Carolinas, Inc.'s ("JWH") motion to compel arbitration. JWH sold lots and "spec" homes on a sixty-five acre residential subdivision. In 2007, respondents ("the Parsons") executed a purchase agreement to buy a home built and sold by JWH ("the Property"). In 2008, the Parsons discovered PVC pipes and a metal lined concrete box buried on their Property. The PVC pipes and box contained "black sludge," which tested positive as a hazardous substance. JWH entered a cleanup contract with the South Carolina Department of Health and Environmental Control. JWH completed and paid for the cleanup per the cleanup contract. The Parsons claim they were unaware the Property was previously an industrial site and contained hazardous substances. In 2011, the Parsons filed the present lawsuit alleging JWH breached the purchase agreement by failing to disclose defects with the Property, selling property that was contaminated, and selling property with known underground pipes. The Parsons further alleged breach of contract, breach of implied warranties, unfair trade practices, negligent misrepresentation, negligence and gross negligence, and fraud. JWH moved to compel arbitration and dismiss the complaint. The motion asserted that all of the Parsons' claims arose out of the purchase agreement, and the Parsons clearly agreed that all such disputes would be decided by arbitration. The circuit court denied the motion and found the arbitration clause was unenforceable. The Court of Appeals affirmed the circuit court's finding that the scope of the arbitration clause was restricted to Warranty claims and declined to address the circuit court's application of the outrageous torts exception doctrine. The Supreme Court disagreed with the appellate court's conclusion and reversed. View "Parsons v. John Wieland Homes" on Justia Law

by
In August 2005, D.R. Horton, Inc. completed construction of the Smiths' home, and the Smiths closed on the property and received the deed. Thereafter, the Smiths experienced a myriad of problems with the home that resulted in severe water damage to the property. D.R. Horton attempted to repair the alleged construction defects on "numerous occasions" during the next five years, but was ultimately unsuccessful. In 2010, the Smiths filed a construction defect case against D.R. Horton and seven subcontractors. In response, D.R. Horton filed a motion to compel arbitration. The Smiths opposed the motion, arguing, inter alia, that the arbitration agreement was unconscionable and therefore unenforceable. The circuit court denied D.R. Horton's motion to compel arbitration, finding that the arbitration agreement was unconscionable. D.R. Horton appealed, but finding no error in the circuit court's decision, the South Carolina Supreme Court affirmed. View "Smith v. D.R. Horton, Inc" on Justia Law

by
Five separate lawsuits were consolidated for the purposes of this opinion. County administrators and registers of deeds in Allendale, Beaufort, Colleton, Hampton, and Jasper Counties (collectively, Respondents) filed suit against MERSCORP Holdings, Inc.; Mortgage Electronic Registrations Systems, Inc. (MERS); and numerous banking institutions (collectively, Petitioners). Respondents contended Petitioners engaged in a practice of fraudulent recordings that have disrupted the integrity of the public index Respondents were statutorily required to maintain. Petitioners moved to dismiss, arguing Respondents "lack contractual standing," the lawsuit was barred by section 30-9-30 of the South Carolina Code (2007), the parties could designate MERS as mortgagee, and the complaints failed to state a cognizable claim. The motion was denied, and Petitioners appealed. The Supreme Court found that Respondents failed to state a claim and therefore reversed the trial court's denial of Petitioners' motion to dismiss. View "Kubic v. MERSCORP" on Justia Law

by
The underlying dispute in this case involved the repair of faulty windows and sliding glass doors in a condominium development, Shipyard Village Horizontal Property Regime (Shipyard Village), in Pawleys Island. Fifty co-owners of units in Buildings C & D of the development (Petitioners) appealed the court of appeals' decision to reverse the trial court's finding that the business judgment rule did not apply to the conduct of the Board of Directors of the Shipyard Village Council of Co-Owners, Inc., and the trial court's decision granting Petitioners partial summary judgment on the issue of breach of the Board's duty to investigate. Finding no reversible erro, the Supreme Court affirmed the court of appeals' decision. View "Fisher v. Shipyard Village" on Justia Law

by
This action arose out of the foreclosure of a lien for delinquent homeowner association fees. Todd Alexander did not appeal the foreclosure; however, he moved to vacate the resulting sale. Alexander's motion to vacate the sale was denied and Alexander appealed. The Court of Appeals dismissed the appeal, finding Alexander failed to comply with South Carolina Code section 18-9-170 to stay the sale and, therefore, the master-in-equity's issuance of the deed rendered the appeal moot. “Our jurisprudence establishes that, despite the master-in-equity's issuance of a deed, an appellate court may reach the merits of the appeal.” The Supreme Court reversed and remanded, holding that the issuance of a deed did not moot the appeal of a foreclosure sale and the appellate court here could reach the merits. View "Wachesaw Plantation v. Alexander" on Justia Law

by
In this familial dispute over property, it was uncontradicted that the decedent Kenneth Walker deeded to his sister, Catherine Brooks, approximately forty acres of property in two separate transfers before his death. The question was whether the property was deeded to Brooks freely, or subject to an equitable mortgage which would require her to return it to Decedent's estate. After review, the Supreme Court held that no equitable mortgage existed; accordingly, the Court remanded. View "Walker v. Brooks" on Justia Law