Justia Civil Procedure Opinion Summaries

This case arose from a construction defect suit brought by a number of homeowners (Petitioners) against their homebuilder and general contractor, Lennar Carolinas, LLC (Lennar). Lennar moved to compel arbitration, citing the arbitration provisions in a series of contracts signed by Petitioners at the time they purchased their homes. Petitioners pointed to purportedly unconscionable provisions in the contracts generally and in the arbitration provision specifically. Citing a number of terms in the contracts, and without delineating between the contracts generally and the arbitration provision specifically, the circuit court denied Lennar's motion to compel, finding the contracts were grossly one-sided and unconscionable and, thus, the arbitration provisions contained within those contracts were unenforceable. The court of appeals reversed, explaining that the United States Supreme Court's holding in Prima Paint Corp. v. Flood & Conklin Manufacturing Co. forbade consideration of unconscionable terms outside of an arbitration provision (the Prima Paint doctrine). The court of appeals found the circuit court's analysis ran afoul of the Prima Paint doctrine as it relied on the oppressive nature of terms outside of the arbitration provisions. While the South Carolina Supreme Court agreed that the circuit court violated the Prima Paint doctrine, it nonetheless agreed with Petitioners and found the arbitration provisions, standing alone, contained a number of oppressive and one-sided terms, thereby rendering the provisions unconscionable and unenforceable under South Carolina law. The Court further declined to sever the unconscionable terms from the remainder of the arbitration provisions, as "it would encourage sophisticated parties to intentionally insert unconscionable terms—that often go unchallenged—throughout their contracts, believing the courts would step in and rescue the party from its gross overreach. ... Rather, we merely recognize that where a contract would remain one-sided and be fragmented after severance, the better policy is to decline the invitation for judicial severance." View "Damico v. Lennar Carolinas, LLC et al." on Justia Law

South Carolina Attorney General Alan Wilson retained Respondents Willoughby & Hoefer, P.A., and Davidson, Wren & DeMasters, P.A., (collectively, the Law Firms) to represent the State in litigation against the United States Department of Energy (DOE). Wilson and the Law Firms executed a litigation retention agreement, which provided that the Law Firms were hired on a contingent fee basis. When the State settled its claims with the DOE for $600 million, Wilson transferred $75 million in attorneys' fees to the Law Firms. Appellants challenged the transfer, claiming it was unconstitutional and unreasonable. The circuit court dismissed Appellants' claims for lack of standing, and the South Carolina Supreme Court certified the case for review of the standing issue. The Supreme Court reversed the circuit court's finding that Appellants lacked public importance standing and remanded the case for the circuit court to consider the merits of Appellants' claims. View "South Carolina Public Interest Foundation, et al. v. Wilson" on Justia Law

The United States Court of Appeals for the Fourth Circuit certified a question of law to the South Carolina Supreme Court. In June 2005, Poly-Med, Inc. (Poly-Med) entered into a Sale of Materials and License Agreement with the predecessor in interest to Defendants Novus Scientific Pte. Ltd., Novus Scientific, Inc., and Novus Scientific AB (collectively, Novus). The Agreement required Poly-Med to develop a surgical mesh for Novus's exclusive use in hernia-repair products. The dispute between Poly-Med and Novus arose from two ongoing obligations in the parties' Agreement. As characterized by the Fourth Circuit, the alleged breach of the Agreement centered on the contractual provisions that contained these two obligations: the "hernia-only" provision and the "patent-application" provisions. The federal court asked whether, under a contract with continuing rights and obligations, did South Carolina law recognize the continuing breach theory in applying the statute of limitations to breach-of-contract claims, such that claims for separate breaches that occurred (or were only first discovered) within the statutory period are not time-barred, notwithstanding the prior occurrence and/or discovery of breaches as to which the statute of limitations has expired? The Supreme Court found South Carolina did not recognize the continuing breach theory. "Moreover, it may matter greatly 'if the breaches are of the same character or type as the previous breaches now barred.'" Nevertheless, in a contract action, the Court held it was the intent of the parties that controlled: "Whether separate breaches of the same character or type as time-barred breaches trigger a new, separate statute of limitations depends on the parties' contractual relationship—specifically, what the parties intended." View "Poly-Med, Inc. v. Novus Scientific Pte. Ltd., et al." on Justia Law

The United States District Court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. Sullivan Management, LLC operated restaurants in South Carolina and filed suit to recover for business interruption losses during COVID-19 under a commercial property insurance policy issued by Fireman's Fund and Allianz Global Risks US Insurance Company (Fireman's). Specifically, the questions was whether the presence of COVID-19 in or near Sullivan's properties, and/or related governmental orders, which allegedly hinder or destroy the fitness, habitability or functionality of property, constituted "direct physical loss or damage" or did "direct physical loss or damage" require some permanent dispossession of the property or physical alteration to the property. The Supreme Court held that the presence of COVID-19 and the corresponding government orders prohibiting indoor dining did not fall within the policy’s trigger language of “direct physical loss or damage.” View "Sullivan Mgmt v. Fireman's Fund" on Justia Law

Wife Olivia Seels Smalls died during the pendency of her divorce from Husband Joe Truman Smalls. The couple accumulated significant assets, including the marital home; eighteen rental properties; and multiple retirement, checking, savings, and investment accounts. Both parties worked during the marriage and contributed to the acquisition of the marital assets. The parties separated in July 2014 when Wife left the marital home. On October 10, 2014, Wife filed the underlying action seeking an order that would, among other things: (1) allow her to live separate and apart from Husband pendente lite and permanently; (2) restrain Husband from harassing her or cancelling her health insurance; (3) permit her to enter the marital home to retrieve her personal belongings; (4) provide separate support and maintenance and/or alimony pendente lite and permanently; and (5) equitably apportion the marital property. Wife alleged she was in poor health and had been subjected to an extended pattern of abusive behavior from Husband, which escalated after she underwent surgery for lung cancer in 2013. Wife also alleged Husband committed adultery at various times during their marriage. Husband filed an answer denying the allegations and asserting counterclaims. He likewise sought a divorce and equitable apportionment of the marital assets. The parties engaged in mediation, but Wife suffered a recurrence of cancer and they never formally entered into a signed agreement resolving their dispute. The issue this case presented for the South Carolina Supreme Court's review centered on whether the family court properly retained jurisdiction to rule on the apportionment of the marital property of the parties when the Wife died. The Court ruled the appellate court did not err in determining the family court properly retained jurisdiction to rule. View "Seels v. Smalls" on Justia Law

The Callawassie Island Members Club, Inc. ("the Club"), brought separate actions against three couples—the Martins, the Freys, and the Quinns—following a dispute over membership dues. The circuit court granted the Club's motion for summary judgment. The court of appeals consolidated the parties' appeals and affirmed. The South Carolina Supreme Court granted a petition for certiorari review filed by Michael Frey, who challenged the award of summary judgment. Frey contended material questions of fact existed as to whether the Club improperly billed him for continuing membership dues, particularly where his membership was suspended over a decade ago and membership was undisputedly optional when he joined. To this the Court concurred, reversed and remanded for further proceedings. View "Callawasie Island Members Club v. Frey" on Justia Law

Central to this case was a dispute between two daughters and a stepdaughter of the testatrix, Jacquelin Stevenson, who died in 2007. She was survived by six children: four from her marriage to Thomas Stevenson, a son by a former marriage, and a stepdaughter. The testatrix's two sons by Stevenson, Thomas and Daniel, stole millions from the estate while co-trustees from 1996 to 2006, thereby forfeiting any rights they had to take under their mother's will and leaving Jacquelin and Kathleen as the personal representatives. The theft by Thomas and Daniel left the estate with insufficient monies remaining to fund specific bequests of $400,000 each to the two stepchildren of the marriage. Further, the bequest of a Lake Summit property to the two sons failed, sending it to the residuary, and because no amendment by codicil preceded the testatrix's demise, after acquired properties passed through the residuary as well. The residuary clause provided that "[a]ll the rest, residue and remainder of my property and estate . . . I give, devise and bequeath to Kathleen S. Turner, Jacquelin S. Bennett, Thomas C. Stevenson, III, Daniel R. Stevenson, James Kelly King, and Genevieve S. Felder in equal shares." The probate court, the circuit court, and the court of appeals all interpreted this to mean in equal ownership interests rather than equal monetary values. Just as the language of the residuary clause was relevant to the resolution of this dispute, so was section 10 of the will, which set forth the powers of the personal representatives and expressly stated the testatrix's intention to give broad discretion and flexibility to her personal representatives. The probate judge, the circuit court, and the court of appeals all determined the broad powers did not govern distributions of the residual estate. Also, the court of appeals affirmed the probate court's finding that the personal representatives' conduct constituted a breach of fiduciary duty. The South Carolina Supreme Court found the court of appeals erred and reversed. View "Bennett v. Estate of James Kelly King" on Justia Law

A church entity became the legal or beneficial owner of certain real and personal property after The Protestant Episcopal Church in the Diocese of South Carolina (Disassociated Diocese) and thirty-six individual Episcopal Parishes (Parishes) disassociated from The Episcopal Church in the United States of America (National Church). The dispute presented two broad questions to the South Carolina Supreme Court: (1) who owned the real estate long-owned and occupied by the individual Parishes; and (2) who was the beneficiary of a statutorily-created trust controlled by the Trustees of The Protestant Episcopal Church in South Carolina (Trustees). The National Church and the Episcopal Church in South Carolina (Associated Diocese) contended the South Carolina Supreme Court made a final decision as to who owned all the disputed property when the Court heard the case in 2015 and each Justice sitting on the Court in 2015 issued a separate opinion in 2017. The Parishes disagreed the Court made a final decision as to the real property occupied by twenty-nine Parishes, and contended the Court left much to be decided by the circuit court as to these Parishes. The Disassociated Diocese and the Trustees agreed the Supreme Court made a final decision as to real and personal property the Trustees formerly held in trust for the Lower Diocese—the second question—but they disagree what that decision was. To the second question presented, the Supreme Court agreed with the National Church and the Associated Diocese that the 2017 Court decided the real and personal property held in trust by the Trustees was held for the benefit of the Associated Diocese. As to the first question, the Supreme Court determined the 2017 Court did not make a final decision as to the real property owned by the twenty-nine Parishes. As to some Parishes, the Court held the circuit court correctly ruled the individual Parish retained ownership of its property. As to other Parishes, those Parishes created an irrevocable trust in favor of the National Church and its diocese, now the Associated Diocese. As to the Parishes that created a trust, the Court directed that appropriate documentation be filed in the public record indicating the National Church and the Associated Diocese now owned that real estate. From its decision here, there will be no remand. "The case is over." View "The Protestant Episcopal Church v. The Episcopal Church" on Justia Law

PCS Nitrogen sought insurance coverage for liability arising from contamination of a fertilizer manufacturing site in Charleston, South Carolina, claiming its right to coverage stemmed from an assignment of insurance benefits executed by Columbia Nitrogen Corporation in 1986. Respondents, the insurance carriers who issued the policies at issue, claimed they owed no coverage because Columbia Nitrogen Corporation executed the assignment without their consent. The circuit court granted summary judgment to Respondents, and the court of appeals affirmed. The South Carolina Supreme Court granted PCS's petition for a writ of certiorari, finding Columbia Nitrogen Corporation executed a valid post-loss assignment of insurance rights in 1986. "PCS cannot be denied coverage on the basis that Respondents did not consent to the assignment." The case was remanded to the trial court for further proceedings. View "PCS Nitrogen, Inc. v Continental Casualty Company, et al." on Justia Law

The South Carolina Supreme Court granted review of a court of appeals' decision affirming a trial court's finding that Respondents Fred's, Inc. (Fred's) and Wildevco, LLC (Wildevco) were entitled to equitable indemnification from Petitioner Tippins-Polk Construction, Inc. (Tippins-Polk). Respondent Fred's was a Tennessee corporation that operated a chain of discount general merchandise stores in several states, including South Carolina. Respondent Wildevco is a South Carolina limited liability company that owned a tract of undeveloped commercial property in Williston, South Carolina. In February 2005, Wildevco and Fred's entered into a lease agreement in which Wildevco agreed to construct a 16,000-square-foot commercial space located in Williston, South Carolina, according to Fred's conceptual design specifications. In turn, Fred's agreed to lease the property for ten years. In April 2005, Wildevco entered into a contract with general contractor Tippins-Polk for the construction of the Fred's store and adjoining strip center. Pursuant to the lease agreement between Wildevco and Fred's, Wildevco was the party responsible for "keep[ing] and repair[ing] the exterior of the [] Premises, including the parking lot, parking lot lights, entrance and exits, sidewalks, ramps, curbs," and various other exterior elements. Fred's was responsible for maintenance of the interior of the premises. Five years after the Fred's store opened, on a sunny day in March, Martha Fountain went to the Williston Fred's to purchase light bulbs. Her toe caught the sloped portion of the ramp at the entrance of the store, causing her to trip and fall. Fountain sustained serious injuries to her hand, wrist, and arm and has undergone five surgeries to alleviate her pain and injuries. Fountain and her husband filed a premises liability suit against Fred's and Wildevco, alleging Respondents breached their duty to invitees by failing to maintain and inspect the premises and failing to discover and make safe or warn of unreasonable risks. Pertinent to this appeal, Tippins-Polk argued the court of appeals erred in finding a special relationship existed between it and Fred's and in finding Respondents proved they were without fault as to the Fountain premises liability claim. Because the Supreme Court found Respondents failed to establish they were without fault in the underlying action, judgment was reversed. View "Fountain v. Fred's, Inc., et al." on Justia Law