Justia Real Estate & Property Law Opinion Summaries

Carolina Park Associates, LLC, lost its interest in a parcel of real property through foreclosure. At the foreclosure sale, an affiliate of one of Carolina Park Associates’ members purchased the property. Appellant Republic-Charleston, the managing member of Carolina Park Associates, contended that the circuit court erred when it dismissed claims seeking to impose a constructive trust in the property and when it cancelled a lis pendens filed by Appellants. Upon review, the Supreme Court concluded Appellants failed to state a claim for which imposition of a constructive trust would have been an appropriate remedy because the facts alleged, even viewed in the light most favorable to them, did not present circumstances in which an equitable remedy was required or needed. Moreover, because dismissal of the claims seeking to impose a constructive trust on the Property was proper, cancellation of the lis pendens was proper. View "Carolina Park Associates v. Marino" on Justia Law

The South Carolina Supreme Court certified the following question from the United States District Court for the District of South Carolina: "In the case of a partial failure of title which is covered by an owner's title insurance policy, where the title defect cannot be removed, should the actual loss suffered by the insured as a result of that partial failure of title be measured by the diminution in value of the insured property as a result of the title defect as of the date of the purchase of the insured property, or as of the date of the discovery of the title defect?" The Court answered the question: consult the contract. "[W]here the insurance contract unambiguously identifies a date for measuring the diminution in value of the insured property or otherwise unambiguously provides for the method of valuation as a result of the title defect, such date or method is controlling. Where, as here, the insurance contract does not unambiguously identify a date for measuring the diminution in value of the insured property or otherwise unambiguously provide for the method of valuation as a result of the title defect, such ambiguity requires a construction allowing for the measure of damages most favorable to the insured. . . .In sum, although [the Court acknowledged] the apparent inequity in [its] answer to the certified question, the resolution of this question [was] not a matter of equity. Rather, [the] Court [was] faced with the task of construing an insurance policy, and in the presence of an ambiguity [it was] constrained to interpret it most favorably to the insured." View "Whitlock v. Stewart Title" on Justia Law

Appellant Jay Warren appealed an order that denied his Rule 55(c) and Rule 60(b)(1), SCRCP motions, as well as his independent motion to set aside a judgment sale. On appeal, he contested only the denial of his motion to set aside. Warren is a state bail bondsman, and Respondent Arrow Bonding Company is also in the bond business. Warren agreed to be responsible if a mutual client forfeited a surety bond issued by Respondent. In October 2006, Respondent obtained a $5,120.00 judgment against Warren after the client forfeited. In August 2007, the clerk issued a Judgment Execution, and on September 19, 2007, the sheriff issued an Execution Account Statement. In this statement, he reported receiving a $1,000 payment from Warren, from which he deducted his $52.50 fee, leaving $947.50 to be applied against the debt. After deducting the $947.50 and adding the interest accrued as of September 19, 2007, Warren's judgment debt stood at $4,705.15. In January 2008, Respondent brought an action to foreclose its judgment lien. Warren did not answer, and the clerk granted Respondent's motions, ordering entry of the default against Warren, and referring the matter to the Master-in-Equity. On the sales day, Warren went to the sheriff's office and tendered the amount due under the original judgment, not the amount then due in light of the accumulated interest and other fees. The Master issued a deed to Respondent, who bought all of Warren's properties, which were sold at the sale as a single lot, leaving a deficiency. Warren filed a motion to set aside the default order under Rule 55(c) and/or Rule 60(b), and to set aside the foreclosure deed. The Master denied all relief requested, and denied the request to reconsider his decision. Upon review of the matter, the Supreme Court concluded that the Master did not err in refusing to set aside the sale or by selling the properties as a single lot. View "Arrow Bonding Company v. Warren" on Justia Law

Stephen E. Lipscomb ("Appellant"), the manager of SEL Properties, LLC ("SEL") appealed a jury verdict against him for tortious interference with a contract entered into by SEL with Dutch Fork Development Group, II, LLC and Dutch Fork Realty, LLC (collectively "Respondents"). Appellant contended that he could not be held individually liable in tort for a contract that was breached by SEL. Alternatively, Appellant challenged the jury's award of $3,000,000 in actual damages to Respondents on grounds: (1) that the trial judge erred in charging the jury that lost customers and lost goodwill were elements of damages as there was no evidence of such damages; and (2) that the award was improper and should have been reduced as the actual damages for the tort claim were "coextensive" with or subsumed in the jury's award of actual damages to Respondents for the breach of contract claim against SEL. Upon review, the Supreme Court found that Appellant was entitled to a directed verdict as to the claim of tortious interference with a contract. Accordingly, the Court reversed the jury's award of damages. View "Dutch Fork Development v. SEL Properties" on Justia Law

Appellant RFT Management Co., L.L.C. (RFT) brought this action against respondents Tinsley & Adams, L.L.P. and attorney Welborn D. Adams (collectively, Law Firm) based on their legal representation of RFT during the closing of its purchase of two real estate investment properties in Greenwood County. RFT alleged claims for (1) professional negligence (legal malpractice), (2) breach of fiduciary duty, (3) violation of the South Carolina Unfair Trade Practices Act1 (UTPA), and (4) aiding and abetting a securities violation in contravention of the South Carolina Uniform Securities Act of 2005 (SCUSA). The trial court granted a directed verdict in favor of Law Firm on RFT's causes of action regarding the UTPA and SCUSA, and it merged RFT's breach of fiduciary claim with its legal malpractice claim. The jury returned a verdict in favor of Law Firm on RFT's remaining claim for legal malpractice. RFT appealed, and the Supreme Court certified the case from the Court of Appeals for its review. Upon review of the matter, the Supreme Court affirmed the trial court with respect to all issues brought on appeal. View "RFT Management Co. v. Tinsley & Adams" on Justia Law

Two issues came before the Supreme Court in this case: (1) whether an assignee of a note and mortgage has a right to surplus funds generated by the foreclosure of a prior mortgage on the property; and (2) whether that assignee is barred from recovering the surplus funds because the note and mortgage assigned to it allegedly were closed without attorney participation. Upon review, the Supreme Court held that the assignee may recover the surplus funds even though it was not a lienholder of record at the time of the sale. The Court took the opportunity of this case to clarify its decision in "Matrix Financial Services Corp. v. Frazer," (714 S.E.2d 532 (2011)), and held that because the mortgage at issue in this case was filed before "Matrix," whether it was closed without the services of an attorney would not bar the assignee from receiving the surplus funds. View "BAC Home Loan Servicing, L.P. v. Kinder " on Justia Law

Brentwood Homes, Inc. and the other appellants in this case (collectively "Brentwood Homes") appealed a circuit court's order denying a motion to stay the proceedings and compel arbitration in a lawsuit filed by Petitioner Fred Bradley that arose out of his purchase of a home in South Carolina. Although Brentwood Homes conceded the Home Purchase Agreement did not meet the technical requirements of the South Carolina Uniform Arbitration Act (the "UAA"), it claimed the court erred in denying the motion because the transaction involved interstate commerce and thus was subject to the Federal Arbitration Act ("FAA"). Upon review, the Supreme Court concluded that because the essential character of the Agreement was strictly for the purchase of a completed residential dwelling and not the construction, the Court found the FAA did not apply. Furthermore, the existence of the national warranty and Bradley's use of out-of-state financing did not negate the intrastate nature of the transaction. Accordingly, the Court affirmed the circuit court's order denying Brentwood Homes' motion to stay the proceedings and compel arbitration as Brentwood Homes failed to offer sufficient evidence that the transaction involved interstate commerce to subject the Agreement to the FAA.

William Watson Eldridge III (Father) created two trusts for the ultimate benefit of his sons, William Watson Eldridge IV (Bill) and Thomas Hadley Eldridge (Tom). In 1973, Father formed a revocable trust (R-trust), for which he was the trustee. When Mother died in 1992, Father amended the R-trust to name Bill and Tom as co-successor trustees. In 1999, Father formed an irrevocable Qualified Personal Residence Trust (QPRT), for which he was trustee, and placed in it a Florida condominium (Florida condo) that he owned. Under the terms of the QPRT, Father could sell the Florida condo, but use of the proceeds was limited to the purchase of a replacement home to be placed in the trust, or the purchase of a separate annuity for the benefit of the trust. The trust document named Sons as co-successor trustees of the QPRT. The terms of the QPRT also provided that if Father died within eight years after its formation, the trust assets were to automatically transfer to the R-trust, of which Sons were beneficiaries. If Father was still living eight years after the formation of the QPRT, the trust assets were to be distributed equally among Sons. Father married Frances Eldridge (Wife) in 2001. Acting as trustee of the QPRT trust, Father sold the Florida condo and used the sales proceeds to buy a Hilton Head home. Instead of titling the Hilton Head home in the name of the QPRT trust, as required under the terms of the trust, he titled it in the name of the R-Trust. In 2003, Father transferred the Hilton Head home from the R-trust to himself and Wife, individually, as joint tenants with the right of survivorship. Father died in 2006, and under the right of survivorship, Wife's sole interest in the Hilton Head home became fully vested. Subsequently, she transferred title in the home to herself as trustee of the Frances Ulmer Eldridge Revocable Trust, of which Wife's children are the beneficiaries at her death. Bill and Tom, as trustees of the R-trust, filed suit against Wife and her trust, claiming that the Hilton Head home was held in either a constructive or a resulting trust for the benefit of the R-trust, and requesting the court to transfer the Hilton Head home to the R-Trust. After a bench trial, the master-in-equity issued judgment in favor of Wife. Upon review, the Supreme Court found that the Sons did not have an adequate legal remedy to cure Father's breach of trust. The law of the case was that a resulting trust arose over the Hilton Head home for the benefit of the R-Trust. Because the Sons filed a claim against Wife and her trust just over a year after Father's death, the Court held that laches could not apply to bar the Sons' claim. Accordingly, the Court reversed and remanded with direction that Respondents execute all documents necessary to re-transfer the Hilton Head home to the R-Trust.

Respondent Hook Point, LLC (Hook Point) was granted a preliminary injunction preventing Appellant Branch Banking and Trust Company (BB&T) from drawing on, and Defendant First Reliance Bank (First Reliance) from honoring, a $1.5 million letter of credit. BB&T appealed. In late 2007, Hook Point sought a loan from BB&T for the purpose of developing a subdivision on property Hook Point owned on Lake Murray called Panama Pointe. BB&T issued a commitment letter to Hook Point in September 2007 indicating that it would loan the company $5.1 million and establish a $2 million line of credit to enable Hook Point to develop the subdivision. Security for the loan included a first mortgage on the Panama Pointe property, personal guarantees of Hook Point’s four principals, and a $1.5 million standby letter of credit issued by First Reliance in favor of BB&T. On December 23, Hook Point filed suit alleging several causes of action against BB&T, including for fraudulent misrepresentation by which BB&T induced Hook Point to enter into a loan agreement. Hook Point admitted to being $70,000 in arrears on interest but argued that the terms of the agreement did not permit BB&T to draw the full amount of the letter of credit (LC) if that exceeded the amount of interest due. It also sought an ex parte temporary restraining order to prevent First Reliance from honoring a draft on the LC by BB&T, which the court granted. After a hearing, the court also granted a preliminary injunction against drafts on or honor of the LC beyond amounts of accrued interest, requiring extension of the LC for one year, and requiring Hook Point to post a $50,000 bond with the court. The Supreme Court reversed the circuit court's grant of the injunction: "[t]he standard under which a fraud in the transaction claim must be measured when deciding whether to enjoin honor of a letter of credit requires that the beneficiary have no colorable claim or basis in fact for asserting its rights under the letter of credit. In this case BB&T has, in [the Court's] view, not only a colorable claim but an undeniable basis in fact for asserting its rights under the letter of credit. Therefore, the circuit court erred when it granted the preliminary injunction."

Appellant East Cherry Grove Realty Co., LLC, appealed a jury verdict which found that South Carolina held title to certain disputed canals in North Myrtle Beach. The question was submitted to the jury on three theories: that two quitclaim deeds established title in the canals; that the canals had been dedicated to the public; and that the State held title to the canals in trust for the public. The jury returned a verdict for the State on all three theories. Appellant argued that the trial court erred when it denied Appellant’s motions for directed verdict on each theory. Upon review, the Supreme Court found that the question of ownership under the quitclaim deeds was properly submitted to the jury and therefore affirmed the verdict.