Beneficial Fin. I, Inc. v. Windham

Decision Date05 August 2020
Docket NumberAppellate Case No. 2017-001954,Opinion No. 5753
Citation847 S.E.2d 793,431 S.C. 256
CourtSouth Carolina Court of Appeals
Parties BENEFICIAL FINANCIAL I, INC., successor by merger to Beneficial Mortgage Co. of South Carolina, Appellant, v. Jon WINDHAM, a/k/a Jon D. Windham; Frances Windham, a/k/a Frances C. Windham; and Jerry Coker, a/k/a Jerry L. Coker; Carolina Bank a/k/a Carolina Bank & Trust Co., The United States of America, by and through its agency, the Internal Revenue Service; and The Citizens Bank, Defendants, Of whom Jon Windham a/k/a Jon D. Windham is the Respondent.

Rebecca Kinlein Lindahl and Richard L. Farley, both of Katten Muchin Rosenman, LLP, of Charlotte, North Carolina, for Appellant.

Penny Hays Cauley, Esquire of Hays Cauley, PC of Florence, for Respondent.

KONDUROS, J.:

In this foreclosure action, Beneficial Financial I, Inc. (Beneficial), lender, challenges the grant of summary judgment to Jon Windham, borrower, on his counterclaims for violation of the South Carolina Unfair Trade Practices Act (SCUTPA), fraud, negligent misrepresentation, intentional infliction of emotional distress, and negligent and reckless training and supervision. Beneficial argues Windham was not entitled to the award because Windham did not meet his burden of proof for any of his counterclaims, even though Beneficial did not submit evidence in opposition at the hearing. We affirm in part, reverse in part, and remand.

FACTS/PROCEDURAL HISTORY

Windham entered into a Loan Repayment and Security Agreement (Agreement) and a mortgage (Mortgage) with Beneficial Mortgage Company of South Carolina dated June 25, 2002, in the amount of $191,912.61, to secure a loan for real property in Florence County, South Carolina. The Agreement required Windham to obtain title insurance and hazard insurance on the property, name Beneficial as loss payee, and provide Beneficial with an endorsement. The Agreement also stated Beneficial could place hazard insurance on the property if Windham failed to maintain the insurance or failed to provide proof of the insurance. The Agreement mandated Windham pay Beneficial the "[p]rincipal and [i]nterest computed at the [c]ontract [r]ate ... and any monthly insurance premium, if elected."

On April 11, 2014, Beneficial filed a complaint against Windham to foreclose on the Mortgage, claiming Windham failed to pay "installments of principal and interest which became due on July 29, 2012," and seeking "the entire balance of said principal and interest due and payable at once" and attorney's fees and costs. Beneficial claimed in its "Notice Required by the Fair Debt Collection Practices Act," the total debt Windham owed as of April 9, 2014, was $230,522.96. Beneficial also sought reformation of the deed and Mortgage.1

Windham answered, asserting Beneficial "wrongfully force-placed insurance" on the property "even though [Beneficial] had knowledge that said property was already insured." Windham argued this added insurance cost "caused [his] payment to increase and also resulted in [his] payments to only be credited to the additional insurance cost rather than to the principal and interest due on the mortgage" and "began the process of [his] initial delinquency." Furthermore, Windham alleged Beneficial represented to him "that if he were to make bimonthly payments of $1,000.00 on the loan for six months, he would be offered a loan modification"; however, Windham alleged Beneficial stopped accepting his payments and did not contact him to modify the loan as promised. Windham counterclaimed against Beneficial alleging violation of the SCUTPA, intentional infliction of emotional distress, negligent training and supervision, reckless and wanton training and supervision,2 breach of implied covenant of good faith and fair dealing, fraud, and negligent misrepresentation.

Beneficial responded to Windham's counterclaims, admitting it "force[-]placed insurance on its collateral and charged Windham with the cost of force-placed insurance" but it did so "as permitted by the loan documents." Moreover, Beneficial admitted Windham made some payments of $1,000 and those payments were applied in accordance with the Mortgage.

During the discovery process, Beneficial repeatedly delayed Windham's deposition of a Beneficial corporate witness. Ultimately, the parties entered into a consent order (Consent Order) dated June 9, 2017, in which Beneficial agreed to produce the corporate witness pursuant to Rule 30(b)(6), SCRCP, on July 10, 2017. The parties also agreed that failure on the part of Beneficial to produce the witness would "result in [Beneficial] being prohibited from offering any testimony in support of [Beneficial's] foreclosure action and also prohibit [Beneficial] from offering any testimony in defense of ... Windham's counterclaims."

Beneficial's corporate representative did not appear for the deposition on July 10, 2017, and Windham filed a motion for summary judgment, a memorandum in support, and his own affidavit. The circuit court held a hearing on August 31, 2017, and found Beneficial "failed to overcome the facts and law set forth by [Windham]" and "there is no genuine issue of material fact in this matter and that summary judgment is due to be granted in [Windham's] favor." This appeal followed.

STANDARD OF REVIEW

"The purpose of summary judgment is to expedite disposition of cases which do not require the services of a fact finder." Wright v. PRG Real Estate Mgmt., Inc. , 426 S.C. 202, 211, 826 S.E.2d 285, 290 (2019) (quoting George v. Fabri , 345 S.C. 440, 452, 548 S.E.2d 868, 874 (2001) ). "When reviewing a grant of summary judgment, appellate courts apply the same standard applied by the trial court pursuant to Rule 56(c), SCRCP." Id. (quoting Turner v. Milliman , 392 S.C. 116, 121-22, 708 S.E.2d 766, 769 (2011) ).

Rule 56(c), SCRCP, provides a circuit court shall grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." "On summary judgment motion, a court must view the facts in the light most favorable to the non-moving party."

Id. at 211-12, 826 S.E.2d at 290 (alteration in original) (quoting George , 345 S.C. at 452, 548 S.E.2d at 874 ).

"Summary judgment is not appropriate where further inquiry into the facts of the case is desirable to clarify the application of the law." Singleton v. Sherer , 377 S.C. 185, 197, 659 S.E.2d 196, 202 (Ct. App. 2008). "When reasonable minds cannot differ on plain, palpable, and indisputable facts, summary judgment should be granted." Id.

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

Rule 56(e), SCRCP (emphasis added).

Our supreme court has addressed the initial burden the moving party carries to succeed on a summary judgment motion:

The grant of summary judgment is appropriate only if it is clear that no genuine issue of material fact exists, that inquiry into the facts is not desirable to clarify the application of the law, and that the movant is entitled to judgment as a matter of law.
A party seeking summary judgment has the burden of clearly establishing by the record properly before the [c]ourt the absence of a triable issue of fact. All inferences from facts in the record must be viewed in the light most favorable to the party opposing the motion for summary judgment. A party who fails to show the absence of a genuine issue of material fact is not entitled to summary judgment even though his adversary does not come forward with opposing materials.

Standard Fire Ins. Co. v. Marine Contracting & Towing Co. , 301 S.C. 418, 422, 392 S.E.2d 460, 462 (1990) (citations omitted).

LAW/ANALYSIS
I. Preservation

Initially, Windham argues Beneficial did not preserve any issue on appeal. Windham alleges because Beneficial "did not object to [his] affidavit and failed to file any memorandum of law in opposition" to his motion, Beneficial failed to preserve any issue regarding the summary judgment award on appeal. We disagree.

[A]n issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial court to be preserved for appellate review.... Error preservation requirements are intended "to enable the lower court to rule properly after it has considered all relevant facts, law, and arguments."

Staubes v. City of Folly Beach , 339 S.C. 406, 412, 529 S.E.2d 543, 546 (2000) (quoting I'On v. Town of Mt. Pleasant , 338 S.C. 406, 422, 526 S.E.2d 716, 724 (2000) ).

However, our supreme court has found an issue is preserved for appeal when

[t]he trial judge's order granted respondents' motion for summary judgment on precisely the grounds argued by respondents at the summary judgment hearing. While that order did not restate the ground on which petitioner opposed the motion—a duty based on the existence of a prior attorney-client relationship—the order explicitly addresses that argument by ruling respondents "owed no duty or obligation" to petitioner. This ruling is sufficient to preserve petitioner's argument that respondents owed a duty to petitioner, and petitioner was not required to file a Rule 59(e)[, SCRCP,] motion to alter or amend in order to preserve the issue for appeal.

Spence v. Wingate , 381 S.C. 487, 489, 674 S.E.2d 169, 170 (2009).

The Consent Order precluded Beneficial from "offering any testimony in defense of ... Windham's counterclaims," and it did not file a memorandum or affidavit related to the summary judgment. However, the circuit court...

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