Administrative
Maryland Lawyer Must Provide SSN, or Lose License
Tankersley v. Almand (Lawyers Weekly No. 001-141-16, 41 pp.) (Diaz, J.) No. 15-1081, Sept. 13, 2016; USDC at Baltimore, Md. (Bennett, J.) 4th Cir.
Holding: A Maryland lawyer who refused to provide his social security number when paying an annual fee to the Maryland Bar’s Client Protection Fund can have his law license suspended, as the 4th Circuit upholds a denial of injunctive relief in the lawyer’s suit alleging violation of the federal Privacy Act.
Administrative
Rulemaking – ‘Position Statement’ – Physical Therapists – Standing – Constitutional
Joseph v. South Carolina Department of Labor (Lawyers Weekly No. 010-073-16, 28 pp.) (Jean Hoefer Toal, Acting Justice) (John Kittredge, J., concurring in the result) (Donald Beatty, J., joined by Costa Pleicones, C.J., dissenting) Appealed from Richland County Circuit Court (G. Thomas Cooper Jr., J.) S.C. S. Ct.
Holding: Where a “Position Statement” adopted by the Board of Physical Therapy has the force of law and therefore constitutes a binding norm, the board should have followed the procedure set out in the Administrative Procedures Act for rulemaking.
We reverse the circuit court’s order upholding the Position Statement.
Arbitration
Contract – Unconscionability – Paragraph & Subparagraphs – Warranties & Dispute Resolution – Home Construction
Smith v. D.R. Horton, Inc. (Lawyers Weekly No. 010-052-16, 19 pp.) (Jean Hoefer Toal, Acting Justice) (John Kittredge, J., joined by Costa Pleicones, C.J., dissenting) Appealed from Dorchester County Circuit Court (Edgar Dickson, J.) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: In the parties’ home construction contract, all of the subparagraphs of paragraph 14 – “Warranties and Dispute Resolution” – must be read as a whole to understand the scope of the warranties and how different disputes are to be handled. Therefore, in determining whether the arbitration provision in subparagraph 14(g) is unconscionable, we may properly consider the entirety of paragraph 14.
We affirm the Court of Appeals’ decision upholding the circuit court’s refusal to enforce the arbitration provision.
Arbitration
Labor & Employment – FLSA – Collective Action – E-Acknowledgement
Gordon v. TBC Retail Group, Inc. (Lawyers Weekly No. 002-146-16, 42 pp.) (David Norton, J.) 2:14-cv-03365; D.S.C.
Holding: The defendant-employer’s arbitration agreement said its current employees had an opportunity to consult with counsel; however, a memorandum accompanying the agreement required the employees to click on an “acknowledgement” of the agreement immediately. There is a genuine issue of material fact as to whether these employees’ electronic acknowledgements were actually consents to the arbitration agreement.
Defendant’s motion to compel arbitration is granted as to employees who electronically signed the arbitration agreement at the time they became employed by defendant. The motion is denied as to named plaintiff Cole and some other plaintiffs. Defendant’s motion for summary judgment is granted in part and denied in part.
Arbitration
Outrageous Torts Exception – Real Property – Failure to Disclose Defects – Scope – Contract – Warranty Booklet
Parsons v. John Wieland Homes & Neighborhoods of the Carolinas, Inc. (Lawyers Weekly No. 010-062-16, 22 pp.) (Costa Pleicones, C.J.) (Kaye Hearn, J., joined by Donald Beatty, J., concurring in part & dissenting in part) (Jean Hoefer Toal, Acting Justice, dissenting) Appealed from York County (Jackson Kimball III, Special Circuit Court Judge) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: Three members of the court hold that the outrageous torts exception to the enforcement of arbitration clauses survived AT&T Mobility, L.L.C. v. Concepcion, 563 U.S. 333 (2011), while two justices say the exception is inconsistent with Concepcion. Nevertheless, four members of the court agree that the exception does not allow the plaintiff-homebuyers to escape the arbitration agreement they entered into with the defendant-developer.
The court reverses the Court of Appeals’ decision, which upheld the circuit court’s ruling that the parties’ arbitration clause was unenforceable.
Attorneys
Disqualification Motion – Former Client – Intellectual Property – Trademark
The Marshall Tucker Band, Inc. v. M T Industries, Inc. (Lawyers Weekly No. 002-173-16, 13 pp.) (Mary Geiger Lewis, J.) 7:16-cv-00420; D.S.C.
Holding: Even though plaintiffs’ counsel have represented defendants in the past, they have not done so since 2010, and neither their past representation nor the factual information they learned about defendants in the course of such representation is related to this trademark infringement lawsuit.
The court denies defendants’ motion to disqualify plaintiffs’ counsel.
Attorneys
Prosecutorial Responsibility – Delegation – Attorney General & Solicitor – State Grand Jury
Pascoe v. Wilson (Lawyers Weekly No. 010-053-16, 26 pp.) (Costa Pleicones, C.J.) (John Few, J., dissenting) S.C. S. Ct.
Holding: A possible conflict of interest led the Attorney General’s office (1) to recuse itself from the investigation of several legislators and (2) to delegate prosecutorial authority in the matter to Solicitor Pascoe. Thereafter, Pascoe had the authority to initiate a state grand jury, and the Attorney General’s purported termination of Pascoe’s designation after the initiation of the state grand jury was ineffective.
We grant petitioner Pascoe’s request for a declaratory judgment. Now that the roles of the parties involved have been clarified, we need not issue a writ of mandamus with regard to the Clerk of Court for the State Grand Jury.
Civil Practice
Class Action – SCUTPA – Federal Rules – Shady Grove
Fejzulai v. Sam’s West, Inc. (Lawyers Weekly No. 002-176-16, 11 pp.) (Bruce Howe Hendricks, J.) 6:14-cv-03601; D.S.C.
Holding: Although Rule 23, FRCP, can trump a state procedural rule against class actions, the federal rule does not trump a state substantive statute’s prohibition on class actions, such as the prohibition found in the South Carolina Unfair Trade Practices Act.
Plaintiffs’ SCUTPA claim is dismissed to the extent it is brought in a representative capacity.
Civil Practice
Diversity Jurisdiction – Removal – Consent – Limited – Untimely
The Gates at Williams-Brice Condominium Association v. Quality Built, LLC (Lawyers Weekly No. 002-175-16, 20 pp.) (Cameron McGowan Currie, S.J.) 3:16-cv-02022; D.S.C.
Holding: After later-added defendant Criterium Engineers filed a timely notice of removal, defendant Quality Built, LLC, filed its consent 31 days after Criterium was served with process; moreover, the consent reserved Quality Built’s right to move to remand if Criterium were dismissed from the case. For both these reasons, the court finds that the consent is ineffective.
The court grants plaintiffs’ motion to remand to state court.
Civil Practice
Fee Awards Permitted Under Rule 41(d)
Andrews v. America’s Living Centers LLC (Lawyers Weekly No. 001-112-16, 18 pp.) (Gregory, J.) No. 15-1658, June 28, 2016; USDC at Asheville, N.C. (Reidinger, J.) 4th Cir.
Holding: An award of attorney’s fees is permissible after a voluntary dismissal under Fed. R. Civ. P. 41(d), if the substantive statute underlying the lawsuit allows recovery of such fees as costs or if a court finds a plaintiff has acted vexatiously; however, the 4th Circuit vacates a district court’s award of $13,403 against a plaintiff who refiled her suit under the Fair Labor Standards Act on the same day she took a voluntary dismissal.
Civil Practice
Fugitives Can’t Challenge Foreign Seizures
U.S. v. Batato (Lawyers Weekly No. 001-135-16, 61 pp.) (Gregory, J.) No. 15-1360, Aug. 12, 2016; USDC at Alexandria, Va. (O’Grady, J.) 4th Cir.
Holding: In this civil forfeiture action arising from criminal copyright infringement and money laundering charges against Kim Dotcom and others allegedly involved in the “Mega Conspiracy,” the 4th Circuit affirms entry of default judgment for the government in its effort to seize funds deposited in claimants’ names in banks in New Zealand and Hong Kong, after disentitlement of claimants from defending their claims under the federal fugitive disentitlement statute, 28 U.S.C. § 2466.
Civil Practice
Motion for Time Extension Works as NOA
Clark v. Cartledge (Lawyers Weekly No. 001-130-16, 26 pp.) (Gregory, J.) No. 15-6248, July 12, 2016; USDC at Rock Hill, S.C. (Hendricks, J.) 4th Cir.
Holding: In a 2-1 decision, a 4th Circuit panel holds that a document filed by a pro se prisoner for an extension of time to request a certificate of appealability qualifies as a notice of appeal under Fed. R. App. 3; the dissent says the majority “dramatically oversteps the bounds of liberally construing a document.”
Civil Practice
Possible Class Action – Placeholder Motion – No Offer of Judgment — TCPA
Career Counseling, Inc. v. Amsterdam Printing & Litho, Inc. (Lawyers Weekly No. 002-132-16, 9 pp.) (J. Michelle Childs, J.) 3:15-cv-05061; D.S.C.
Holding: Where defendants have not indicated that they intend to file an offer of judgment under Rule 68, FRCP, to “pick off” the named plaintiff in this putative class action, the court declines to allow plaintiff to file, but not yet pursue, a motion to certify the class.
The court denies plaintiff’s motion to certify class without prejudice and with leave to refile.
Civil Practice
Preliminary Injunction – Contempt – Literal Compliance – Security
Spartanburg Buddhist Center of South Carolina v. Ork (Lawyers Weekly No. 011-069-16, 8 pp.) (Stephanie McDonald, J.) Appealed from Spartanburg County Circuit Court (R. Keith Kelly, J.) S.C. App.
Holding: Where the circuit court’s first preliminary injunction merely required defendant to return the funds he had withdrawn from plaintiff’s bank account, defendant complied with the order by re-depositing the funds. He did not violate the order when he subsequently wrote checks on the account.
We reverse the circuit court’s order holding defendant in contempt.
Civil Rights
Attorney’s Fees – Medicaid – Successful Appeals
Doe v. Kidd (Lawyers Weekly No. 006-002-16, 39 pp.) (Roger Gregory, C.J.) No. 14-1428. Appealed from USDC at Columbia, S.C. (Margaret Seymour, S.J.); 4th Cir. Unpub.
Holding: After two successful appeals in which plaintiff secured rulings that (1) 42 U.S.C. § 1396a(a)(8) of the Medicaid Act creates a private right of action that is enforceable through 42 U.S.C. § 1983 and (2) that defendants had failed to comply with the Medicaid Act “through their ongoing refusal to finance residential habilitation services at an acceptable … placement to” plaintiff. The district court’s finding – in support of its significant reduction in plaintiff’s attorney’s fees, guardian ad litem fees, and costs – that there had “been no change in the status quo” was clearly wrong.
We vacate the attorneys’ fee award and direct entry for an award of $669,077.20, exclusive of costs; we vacate the guardian ad litem fee award and direct entry for an award of $39,173.75; and we remand for further proceedings consistent with this opinion.
Civil Rights
Court Allows Prayers by N.C. County Commissioners
Lund v. Rowan County, N.C. (Lawyers Weekly No. 001-143-16, 73 pp.) (Agee, J.) No. 15-1591, Sept. 19, 2016; USDC at Greensboro, N.C. (Beaty, J.) 4th Cir.
Holding: Although elected county commissioners, all of whom are Christian, lead invocations opening each meeting of the board of commissioners, and invite the public to stand and join in prayer, these practices do not violate the First Amendment’s Establishment Clause; in a 2-1 decision, a 4th Circuit panel reverses a district court decision that held the county’s prayer practices unconstitutional.
Civil Rights
Municipal Policy – Labor & Employment – Trench Work – Constitutional – Due Process
Estate of Myers v. City of Columbia (Lawyers Weekly No. 002-121-16, 6 pp.) (Mary Geiger Lewis, J.) 3:16-cv-00852; D.S.C.
Holding: Plaintiffs’ decedent died because the trench he was working in collapsed. Plaintiffs allege that, in favor of expediency and cost-cutting, the defendant-city/employer maintains a policy and practice that required the decedent, and continues to require his co-workers, to work in trenches without trench boxes five to 15 times per month and harshly punishes employees who raise safety concerns. Plaintiffs have thus (1) alleged conduct that appears to rise above negligence and (2) stated a substantive due process claim.
The court denies the city’s motion to dismiss.
Constitutional
Freedom of Speech – Municipal – Tour Guides – Licensing Requirement
Billups v. City of Charleston (Lawyers Weekly No. 002-125-16, 45 pp.) (David Norton, J.) 2:16-cv-00264; D.S.C.
Holding: The plaintiff-prospective tour guides have stated a claim for violation of their free speech rights based on the defendant-city’s requirement that they pass a test before they can operate tours for money; however, plaintiffs have failed to make a sufficient showing to have the city’s licensing regime preliminarily enjoined.
Defendant’s motion to dismiss is denied. Plaintiffs’ motion for a preliminary injunction is also denied.
Contract
Covenant Not to Execute – Auto Insurance
Garrison Property & Casualty Insurance Co. v. Cothran (Lawyers Weekly No. 002-137-16, 7 pp.) (Patrick Michael Duffy, J.) 2:15-cv-04379; D.S.C.
Holding: Where defendants’ covenant not to execute granted defendant Rickborn the ability to pursue claims only for liability and underinsured motorist benefits, defendant Cothran could not have acted in bad faith by refusing to give Rickborn an additional, theoretical distinct means of obtaining money from the plaintiff-insurer, i.e., Cothran’s right to sue the insurer if it acts in bad faith toward him in its handling of Rickborn’s demand for liability benefits.
The court grants Cothran’s motion to dismiss Rickborn’s crossclaim.
Contract
Declaratory Judgment Action – Licensing Statute – Tort/Negligence – Fraud & Unfair Trade Practices
Carolina Cargo, Inc. of Rock Hill v. Transportation Personnel Services, Inc. (Lawyers Weekly No. 002-167-16, 10 pp.) (J. Michelle Childs, J.) 0:15-cv-04629; D.S.C.
Holding: Even though the licensing statutes in question do not provide for a private right of action, since plaintiff has alleged that defendants entered into a service contract with plaintiff without meeting the necessary licensing provisions under South Carolina law, plaintiff has sufficiently stated a claim that would entitle it to declaratory relief if defendants entered into the service contract without having legal authority to perform the services agreed to therein.
Defendants’ motion to dismiss is granted in part and denied in part.
Contract
Real Property – Master Deed – Jury Trial & Class Action Waiver – POA’s Amendment
The Gates at Williams-Brice Condominium Association v. DDC Construction, Inc. (Lawyers Weekly No. 011-080-16, 18 pp.) (H. Bruce Williams, J.) Appealed from Richland County Circuit Court (G. Thomas Cooper Jr., J.) S.C. App.
Holding: Even though a condominium’s master deed allowed the property owners’ association to amend it, the POA’s amendment – made after the POA filed this faulty-construction lawsuit and the first defendant had already answered – does not deprive defendants of their pre-amendment right to enforce property owners’ waiver of their rights to a jury trial and to bring a class action.
We reverse the circuit court’s denial of defendants’ motion for a nonjury trial and to strike plaintiff Swinson’s class action.
Contract
Sales & Secured Transactions – Civil Practice – Statute of Limitations – First Impression – Car Repossession – Deficiency Action
Coastal Federal Credit Union v. Brown (Lawyers Weekly No. 011-063-16, 10 pp.) (Jasper Cureton, A.J.) (Paul Short Jr., J., concurring in part & dissenting in part) Appealed from Charleston County Circuit Court (R. Markley Dennis Jr., J.) S.C. App.
Holding: When an auto dealership assigned the defendant-purchaser’s installment sales contract to the plaintiff-credit union, the dealership assigned not only the security aspect of the contract, but also the sales aspect of the contract. Therefore, a six-year statute of limitations applied to plaintiff’s claim for the deficiency that remained after plaintiff repossessed and sold the vehicle.
We vacate the circuit court’s ruling that the South Carolina Consumer Protection Code (SCCPC) and the Fair Debt Collections Practices Act (FDCPA) apply to this case. We reverse the circuit court’s grant of summary judgment to defendant.
Contract
Tort/Negligence – Economic Loss Doctrine – Engineering Services
Sherman Construction Co. v. NGM Insurance Co. (Lawyers Weekly No. 002-178-16, 7 pp.) (Joseph Anderson Jr., J.) 3:15-cv-03189; D.S.C.
Holding: There is a contractual relationship between the plaintiff-general contractor and defendant BlueScope Buildings of North America, Inc., a sub-subcontractor; however, plaintiff alleges a special relationship, apparently based on the sub-sub’s provision of engineering services. Therefore, the economic loss rule may not bar plaintiff’s negligence and interference-with-contract claims against the sub-sub.
The sub-subcontractor’s motion to dismiss is denied.
Criminal Practice
Murder – Immunity – Stand Your Ground – ‘Another’ Place
State v. Douglas (Lawyers Weekly No. 010-054-16, 2 pp.) (Per Curiam) Appealed from Chesterfield County Circuit Court (J. Michael Baxley, J.) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: We improvidently granted certiorari to review the Court of Appeals’ decision (Since the deceased was initially invited into defendant’s home and later attacked defendant there, defendant could seek immunity under S.C. Code Ann. § 16-11-440(C), which applies when a person “is attacked in another place where he has a right to be….”).
Dismissed as improvidently granted.
Criminal Practice
PCR – Sentencing – Constitutional – Jury Trial Right
Castro v. State (Lawyers Weekly No. 010-055-16, 7 pp.) (Per Curiam) Appealed from Horry County (Larry Hyman Jr., Circuit Court Judge; Kristi Lea Harrington, Post-Conviction Judge) S.C. S. Ct.
Holding: Regardless of the fact that the trial judge considered the overwhelming evidence presented against petitioner, as well as his pending charges and immigration status, in sentencing petitioner, and despite the fact that the trial judge said he was not “punishing” petitioner for exercising his right to a jury trial, the trial judge unequivocally considered petitioner’s decision to reject a plea offer and proceed to trial as a factor in sentencing petitioner. This was improper.
We reverse the post-conviction relief judge’s denial of relief, and we remand for resentencing.
Criminal Practice
Sentencing – Restitution – Civil Settlement – First Impression – DUI
State v. Morgan (Lawyers Weekly No. 011-071-16, 7 pp.) (Stephanie McDonald, J.) Appealed from Pickens County Circuit Court (Letitia Verdin, J.) S.C. App.
Holding: As part of the $25,000 settlement of a civil action between defendant and the victim of his drunk-driving accident, the victim and defendant’s insurance company entered into a covenant not to execute; nevertheless, the sentencing court could still order defendant to pay restitution in the amount of $238,660.10.
We affirm the circuit court’s restitution order.
Criminal Practice
Stand Your Ground – Pretrial Determination – Evidentiary Hearing Unnecessary
State v. Manning (Lawyers Weekly No. 010-071-16, 10 pp.) (Jean Hoefer Toal, Acting Justice) (Costa Pleicones, C.J., dissenting) Appealed from Richland County Circuit Court (G. Thomas Cooper Jr., J.) On writ of certiorari to the Court of Appeals. S. C. S. Ct.
Holding: When a criminal defendant claims immunity under the Protection of Persons and Property Act (the Act), the trial court will decide on a case-by-case basis whether or not an evidentiary hearing is required.
In this case, the trial court properly made its determination without an evidentiary hearing. We reverse the Court of Appeals’ decision, which held that the trial court was required to grant defendant a full evidentiary hearing prior to determining whether the Act’s immunity provision applied.
Domestic Relations
Contempt – Parent & Child – ‘Forced’ Visitation
Noojin v. Noojin (Lawyers Weekly No. 011-065-16, 16 pp.) (John Geathers, J.) Appealed from Richland County Family Court (Michelle Hurley, J.) S.C. App.
Holding: Where the plaintiff-mother (a psychologist) introduced the negative concept of “forced visitation” to the parties’ children, allowed the children to refuse to visit the defendant-father, and kept the father in the dark about the children’s activities, the mother willfully violated a court order.
We affirm the family court’s order holding the mother in contempt and requiring her to pay the father’s attorney’s fees and costs.
Domestic Relations
Equitable Distribution – Civil Practice – Intervention – Contempt – Divorce, Alimony & Attorney’s Fees
Stoney v. Stoney (Lawyers Weekly No. 011-073-16, 25 pp.) (Stephanie McDonald, J.) Appealed from Orangeburg County Family Court (Peter Nuessle, J.) S.C. App.
Holding: The defendant-husband’s brother (Brother) had significant interest in the parties’ restaurant businesses, so the family court didn’t err in allowing Brother to intervene in their equitable distribution case; however, the family court did err in allowing Brother’s counsel to involve himself in matters wholly unrelated to those in which Brother had a purported interest.
We reverse and remand the family court’s divorce, alimony and equitable distribution orders, as well as its ruling on the plaintiff-wife’s last petition for rule to show cause.
Elections
N.C. Voter Law Shows ‘Discriminatory Intent’
N.C. State Conference of the NAACP v. McCrory (Lawyers Weekly No. 001-133-16, 83 pp.) (Motz, J.) No. 16-1468(L), July 29, 2016; USDC at Greensboro, N.C. (Schroeder, J.) 4th Cir.
Holding: A North Carolina district court upholding the challenged portions of North Carolina’s Voter Identification law ignored critical facts bearing on discriminatory intent, including the inextricable link between race and politics in North Carolina, and the 4th Circuit reverses the decision and remands with instructions to enjoin the challenged provisions of SL 2013-381 regarding photo ID, early voting, same-day registration, out-of-precinct voting and preregistration.
Insurance
Auto – Civil Practice – Class Action – Breach of Contract – Standing – ‘Betterments’
Colter v. Omni Insurance Co. (Lawyers Weekly No. 002-131-16, 7 pp.) (J. Michelle Childs, J.) 3:15-cv-04171; D.S.C.
Holding: The plaintiff in this putative class action complains that, after defendants’ insured caused a traffic accident that damaged plaintiff’s vehicle, defendants told plaintiff that she would receive an amount equal to her repair estimate minus a betterment or depreciation charge for certain damaged parts. The court rejects defendants’ argument that plaintiff lacks standing to raise a breach of contract claim for two reasons: (1) there are four other putative class claims, and a lead plaintiff need not have standing to assert every claim that is being raised in the litigation as long as a member of the putative class has such standing and (2) plaintiff may be a third-party beneficiary of defendants’ contract with its insured.
The court denies defendants’ motion to dismiss.
Insurance
Auto – ‘Betterments’ – Legality – Measure of Damages
Colter v. Omni Insurance Co. (Lawyers Weekly No. 002-135-16, 7 pp.) (J. Michelle Childs, J.) 3:15-cv-04171; D.S.C.
Holding: The illegality of “betterments” (depreciation charges) is a condition precedent to plaintiff’s claims against the defendant-insurers; however, the court cannot read South Carolina decisions defining the measure of damages in such a way that would make the imposition of a betterment charge by defendants illegal in this case.
Defendant’s motion to dismiss is granted.
Insurance
Auto – Insolvent Insurer – Guaranty Association – Statutory Offset
Buchanan v. South Carolina Property & Casualty Insurance Guaranty Association (Lawyers Weekly No. 011-066-16, 6 pp.) (James Lockemy, C.J.) Appealed from Bamberg County Circuit Court (Doyet Early III, J.) S.C. App.
Holding: Where (1) plaintiffs suffered $800,000 in damages as a result of their decedent’s fatal auto accident; (2) one tortfeasor had a $1,000,000 insurance policy, but his insurer was insolvent; and (3) plaintiffs recovered a total of $376,622 from workers’ compensation benefits and other tortfeasors’ insurance, the circuit court correctly deducted the plaintiffs’ $376,622 recovery from their $800,000 in damages and therefore determined that the defendant-guaranty association was required to pay plaintiffs its statutory cap amount of $300,000.
We affirm judgment for plaintiffs.
Insurance
CGL – Assault & Battery Exclusion – Intent – Nightclub Shootings – Duty to Defend
Canopius US Insurance, Inc. v. Middleton (Lawyers Weekly No. 002-156-16, 21 pp.) (David Norton, J.) 2:15-cv-03673; D.S.C.
Holding: Where a nightclub patron alleges that he was shot after a dispute escalated into gunfire, the plaintiff-insurer does not have to defend the insured nightclub owner. However, the insurer is required to defend several underlying lawsuits in which patrons alleged that they were “injured by the discharge of a firearm” at the nightclub.
Plaintiff’s motion for summary judgment is granted as to the lawsuit brought against the nightclub by Brandon Greene; otherwise, the motion is denied.
Insurance
Medical Malpractice – Bad Faith – Eroding Policy – Fake Physician – Colleagues’ Coverage
Agape Senior Primary Care, Inc. v. Evanston Insurance Co. (Lawyers Weekly No. 002-179-16, 9 pp.) (Joseph Anderson Jr., J.) 3:16-cv-01610; D.S.C.
Holding: Since the parties’ insurance contract was an “eroding policy,” in which defense costs reduce the available benefits, plaintiff has stated a bad faith claim based on its allegations that original counsel were properly performing their duties when defendant replaced them with different counsel, who then had to retrace the steps of original counsel, resulting in unnecessary wasting of the policy’s funds.
Defendant’s motion to dismiss is denied as to plaintiff’s breach of contract and bad faith claims arising from the underlying Watts litigation. With regard to prior claims, the court grants defendant’s motion to dismiss plaintiff’s breach of contract claims but denies the motion as to plaintiff’s bad faith claims.
Intellectual Property
Copyright Act – Preemption – Breach of Contract – Additional Element – Remand
Hireguru, LLC v. McKay (Lawyers Weekly No. 002-170-16, 6 pp.) (Margaret Seymour, S.J.) 3:16-cv-01669; D.S.C.
Holding: The terms and conditions of the clickwrap agreement on plaintiff’s website – to which defendants agreed – offer protections beyond what is offered by the Copyright Act, including a prohibition on reverse engineering. Therefore, plaintiff’s breach of contract claim is not preempted by the Copyright Act.
Plaintiff’s motion to remand to state court is granted.
Labor & Employment
Deputy Clerk Wins Trial of Political Discharge Claim
Lawson v. Union County Clerk of Court (Lawyers Weekly No. 001-126-16, 97 pp.) (Duncan, J.) No. 14-2360, July 7, 2016; USDC at Spartanburg, S.C. (Cain, J.) 4th Cir.
Holding: The 4th Circuit overturns summary judgment for a local court clerk who fired a deputy clerk who, while campaigning against him, made comments about funds to pay for a coworker who “should not be working” in the clerk’s office because “the county council” did not want her there and the coworker already was “drawing her social security and her retirement.”
Labor & Employment
Fire Captains Win Overtime Pay
Morrison v. County of Fairfax, Va. (Lawyers Weekly No. 001-116-16, 36 pp.) (Harris, J.) No. 14-2308, USDC at Alexandria, Va. (Hilton, J.) 4th Cir.
Holding: Fire captains in Fairfax County, Virginia, are not “executive” and “administrative” employees exempt from the overtime pay provisions of the Fair Labor Standards Act; the county has not shown that the captains’ primary duty is anything other than first response, and the 4th Circuit reverses a district court decision denying the captains overtime pay.
Labor & Employment
FLSA – Minimum Wages & Overtime – Collective Action – Arbitration Agreement
Sittner v. Country Club, Inc. (Lawyers Weekly No. 002-134-16, 11 pp.) (R. Bryan Harwell, J.) 4:15-cv-05043; D.S.C.
Holding: Even if some potential plaintiffs in this putative collective action might not have signed arbitration agreements with the defendant-employer, the named plaintiff did, and she does not contest the enforceability of the arbitration agreement she signed. Regardless of whether a class is later certified, the named plaintiff is subject to the arbitration provision.
The court grants defendant’s motion to compel arbitration. Plaintiff’s complaint is stayed pending the outcome of the arbitration.
Labor & Employment
Retaliatory Discharge – FLSA – Comp Time Request
Mensack v. South Carolina Department of Mental Health (Lawyers Weekly No. 002-157-16, 9 pp.) (Cameron McGowan Currie, S.J.) 3:16-cv-00723; D.S.C.
Holding: Where plaintiff alleges that she was fired for requesting compensatory time, she has not stated a claim under S.C. Code Ann. § 8-11-55 (“Any state employee who is required to work overtime during any particular week may, as a result, be given compensatory time by his agency. Compensatory time, if granted, must be in accordance with the Federal Fair Labor Standards Act of 1938 as amended.”), since the statute does not address retaliation.
The court supplements and adopts the magistrate judge’s recommendation to dismiss several of plaintiff’s claims and to limit others.
Labor & Employment
Subcontract Does Not Bar FLSA Claim
Amaya v. Power Design Inc. (Lawyers Weekly No. 001-136-16, 22 pp.) (Diaz, J.) No. 15-1691, Aug. 15, 2016; USDC at Baltimore, Md. (Motz, J.) 4th Cir.
Holding: In this suit by 20 electrical workers for unpaid hourly and overtime wages for work on a federally funded subcontract, the 4th Circuit vacates summary judgment for the subcontractor and remands for consideration of plaintiffs’ claims under the Fair Labor Standards Act.
Municipal
Annexation – Civil Practice – Standing – 100 Percent Method – National Forest
Vicary v. Town of Awendaw (Lawyers Weekly No. 011-078-16, 7 pp.) (James Lockemy, C.J.) Appealed from Charleston County Circuit Court (J. C. Nicholson Jr., J.) S.C. App.
Holding: Pursuant to the request of two landowners, the defendant-town annexed the landowners’ properties after allegedly falsely saying it had received a “no objection” letter from the National Forest Service, allowing the town to annex a 10-foot strip of the Francis Marion National Forest between the town and the landowners’ properties. Two town residents and the South Carolina Coastal Conservation League lack standing to challenge these annexations, which were completed pursuant to the 100-percent petition method outlined in S.C. Code Ann. § 5-3-150(3).
We reverse judgment for plaintiffs.
Real Property
Constitutional – Inverse Condemnation Claim – Police Action – Innocent Owner
Carolina Convenience Stores, Inc. v. City of Spartanburg (Lawyers Weekly No. 010-070-16, 10 pp.) (Costa Pleicones, C.J.) (Donald Beatty, J., concurring in the result only without separate opinion) (John Kittredge & Kaye Hearn, JJ., dissenting in separate opinions) Appealed from Spartanburg County Circuit Court (E.C. Burnett III & Roger Couch, JJ.) S.C. Supreme Court
Holding: The South Carolina Constitution does not contemplate that a compensable taking occurs when private property is damaged by law enforcement in the course of performing their duties.
We modify and affirm the Court of Appeals’ decision, which upheld the circuit court’s grant of summary judgment for the defendant-city as to plaintiff’s inverse condemnation claim.
Real Property
Mortgages – Consumer Protection – Attorneys – Preference Form – Prepopulated
Mosley v. Quicken Loans, Inc. (Lawyers Weekly No. 002-124-16, 10 pp.) (J. Michelle Childs, J.) 1:16-cv-00384; D.S.C.
Holding: It is hard to imagine how the defendant-lender could have ascertained the plaintiff-borrower’s preference for an attorney if defendant essentially told plaintiff what his preference was by providing him with an already completed form.
The court denies defendant’s motion to dismiss plaintiff’s claim that defendant violated S.C. Code Ann. § 37-10-102; however, the court grants defendant’s motion to dismiss plaintiff’s claim for relief under § 37-10-105(c).
Tort/Negligence
Civil Conspiracy – Special Damages – Contract – Civil Practice – Appeals – Preservation
Allegro, Inc. v. Scully (Lawyers Weekly No. 010-069-16, 13 pp.) (Kaye Hearn, J.) (Donald Beatty, J., concurring in part & dissenting in part) (Costa Pleicones, C.J., dissenting) Appealed from Richland County Circuit Court (L. Casey Manning, J.) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: Plaintiff neither pled nor argued special damages, and plaintiff only offered evidence of general damages. Where there was no indication of specific damages emanating solely from the civil conspiracy, the trial court erred in failing to grant defendants’ motion for judgment notwithstanding the verdict.
We reverse the Court of Appeals’ decision to remand for trial plaintiff’s claims of civil conspiracy, breach of contract and breach of contract accompanied by a fraudulent act. The trial court should have granted defendants’ motion for JNOV as to these claims.
Tort/Negligence
False Imprisonment & Malicious Prosecution – Copper Theft – Owner & Recycler
Huffman v. Sunshine Recycling, LLC (Lawyers Weekly No. 011-058-16, 16 pp.) (John Geathers, J.) Appealed from Orangeburg County Circuit Court (Maité Murphy, J.) S.C. App.
Holding: After copper and aluminum were stolen from an electric company and sold to a recycling company, employees from both companies were involved in the investigation and prosecution of plaintiff for the receipt of stolen property, ignoring evidence that plaintiff was not guilty. There is a genuine issue of fact as to whether plaintiff’s arrest was lawful; whether the defendant-companies caused, instigated or procured plaintiff’s arrest; whether there was probable cause to charge plaintiff with receiving stolen goods; and as to respondents’ participation in law enforcement’s charging plaintiff with receiving stolen goods.
We reverse the circuit court’s grant of summary judgment for defendants.
Tort/Negligence
No Duty to Warn – Wife of Pedophile – Neighbor’s Children – No Premises Liability
Roe v. Bibby (Lawyers Weekly No. 010-059-12, 2 pp.) (Per Curiam) Appealed from Berkeley County Circuit Court (R. Markley Dennis Jr., J.) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: We improvidently granted certiorari to review the Court of Appeals’ decision (Even though defendant invited the minor plaintiffs to the house she shared with her husband, who had molested their daughter when she was young, there is no evidence that respondent had a special relationship with the minor plaintiffs; that she had the ability to monitor, supervise or control the conduct of her husband; or that she had knowledge of a specific threat of harm to a specific individual. Defendant did not have a duty to warn plaintiffs about her husband.).
Dismissed as improvidently granted.
Tort/Negligence
Product Liability – Adequate Warning – Personal Watercraft Passenger
Hickerson v. Yamaha Motor Corp., U.S.A. (Lawyers Weekly No. 002-153-16, 15 pp.) (J. Michelle Childs, J.) 8:13-cv-02311; D.S.C.
Holding: Where (1) the court has excluded the warning system proposed by plaintiff’s expert, (2) defendant’s labels warned of the exact injuries suffered by plaintiff-passenger when she fell off a personal watercraft, and (3) plaintiff has said that she is not sure whether she would have changed her behavior if she had read the warnings, plaintiff has not shown that defendants failed to provide an adequate warning for its product.
Summary judgment for defendants.
Tort/Negligence
Product Liability – Defective Design – Alternative Design – Expert Team
Marshall v. Lowe’s Home Centers (Lawyers Weekly No. 002-148-16, 61 pp.) (R. Bryan Harwell, J.) 4:14-cv-04585; D.S.C.
Holding: Even though neither of plaintiff’s two experts was qualified on his own to explain every aspect of the problems with the design of the defendant-manufacturer’s propane tank top heater, together, the chemist and the mechanical engineer were well qualified to do so.
The court denies the parties’ motions to disqualify each other’s expert witnesses. The court grants summary judgment for defendant Lowe’s Home Centers on plaintiff’s claim of negligent design; otherwise, defendants’ motion for summary judgment is denied.
Tort/Negligence
Proximate Cause – Roof Fire – Combustible Materials – Jury & Jurors – College Alumna – Contract – Damages
Winthrop University Trustees v. Pickens Roofing & Sheet Metals, Inc. (Lawyers Weekly No. 011-075-16, 20 pp.) (Stephanie McDonald, J.) Appealed from York County Circuit Court (Lee Alford, J.) S.C. App.
Holding: Even though experts could not determine an ignition source for the roof fire that damaged two Winthrop University buildings and a connecting roof, there was sufficient evidence that the fire damage would not have occurred but for the defendant-contractor’s negligence in leaving combustible materials on the connecting roof.
We affirm judgment for the university.
Tort/Negligence
Restoration Work – Evidence – Construction & Antiques Experts – Breach of Contract
Belfor USA Group, Inc. v. Banks (Lawyers Weekly No. 002-136-16, 20 pp.) (David Norton, J.) 2:15-cv-01818; D.S.C.
Holding: Defendants’ mere identification of their construction and antiques experts, along with a bare-bones “report” from one construction expert, were insufficient to comply with Rule 26, FRCP.
The court grants plaintiff’s motion to exclude defendants’ experts. Plaintiff’s motion for summary judgment is granted as to defendants’ negligence counterclaims but denied as to defendants’ breach of contract counterclaim.
Tort/Negligence
Traffic Accident – Stopped School Bus – Second Car Behind – Left Turn
Singleton v. Cuthbert (Lawyers Weekly No. 011-064-16, 5 pp.) (Stephanie McDonald, J.) (Paul Short Jr., J., dissenting) Appealed from Beaufort County Circuit Court (J. Ernest Kinard Jr., J.) S.C. App.
Holding: Where plaintiff was in the second car behind a stopped school bus, she was neither passing nor overtaking the bus when she made a left turn into her mother’s driveway. Therefore, the trial court erred in directing a verdict that plaintiff was negligent as a matter of law under S.C. Code Ann. § 56-5-2770(A).
Reversed and remanded for a new trial.
Tort/Negligence
Wrongful Death – Suicide – Uncontrollable Impulse — Traffic Accident – Product Liability – Delayed Airbag Deployment – Punitive Damages
Wickersham v. Ford Motor Co. (Lawyers Weekly No. 002-130-16, 33 pp.) (David Norton, J.) 9:13-cv-01192; D.S.C.
Holding: As a general rule, suicide constitutes an independent act of the decedent that extinguishes the line of causation connecting a defendant’s actions to the decedent’s death; however, this court finds that South Carolina recognizes the uncontrollable impulse exception and that this exception need not be limited to causation by “insanity.”
Defendant’s motion for summary judgment is denied.
Trusts & Estates
Breach of Fiduciary Duty – Withdrawn Funds – Missing CD – Attorney’s Fees
Ballard v. Combis (Lawyers Weekly No. 002-171-16, 34 pp.) (Joseph Anderson Jr., J.) 0:14-cv-01839; D.S.C.
Holding: When defendant Diane Combis was trustee of the plaintiff-successor trustee’s trust, she withdrew $412,000 from the trust’s account and deposited it into an account that she and her husband owned jointly. In so doing, she personally benefitted from that action, her actions greatly depleted the trust’s resources, and the trust’s beneficiaries were injured. Accordingly, the court finds that Diane breached her fiduciary duty and is liable for constructive fraud.
On plaintiff’s breach of fiduciary duty claim, defendants George and Diane Combis are jointly and severally indebted to the trust in the amount of $412,000 plus interest at the North Carolina statutory rate (eight percent), for a total of $711,619.94. On the claim of a missing certificate of deposit, Diane is liable to the trust in the total amount of $84,544.12. George and respondent Superior Tile, Marble, and Terrazzo, Inc., are entitled to a setoff of $87,147.82 for their mortgage payments on trust property. The trustee/attorney’s fees are reduced by $14,000. George and Diane shall pay $54,612.50 of the trustee and probate fees. The remainder of the fees shall be paid pursuant to the parties’ representation agreement.
Zoning
Municipal – Special Use Exception – Horse Stable – Residential District
Arkay, LLC v. City of Charleston (Lawyers Weekly No. 011-061-16, 12 pp.) (H. Bruce Williams, J.) (Paula Thomas, J., dissenting) Appealed from Charleston County Circuit Court (J.C. Nicholson Jr., J.) S.C. App.
Holding: Charleston requires horse stables to be at least 100 feet away from residentially zoned districts. Respondent couldn’t get around that requirement by dividing its building so that horse stalls were on the side farthest away from the nearest residential district.
We reverse the circuit court’s decision, which reversed the Charleston Board of Zoning Appeals’ denial of a special use exception.