BPD Diversified, Inc. v. Benchmark Capital Inv.
| Decision Date | 06 July 2007 |
| Docket Number | 2007-UP-347 |
| Parties | BPD Diversified, Inc., d/b/a Bank Planning and Design, Respondent, v. Benchmark Capital Investment, LLC, Appellant. |
| Court | South Carolina Court of Appeals |
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
Submitted June 1, 2007
Appeal From Greenville County Charles B. Simmons, Jr. Master-In-Equity
Randall Scott Hiller, of Greenville, for Appellant.
Theodore Von Keller, of Columbia, for Respondent.
BPD Diversified, Inc., d/b/a Bank Planning and Design (BPD”), brought this action for foreclosure of a mechanic's lien and breach of contract against Benchmark Capital Investment, LLC (Benchmark”). Benchmark failed to answer the complaint and went into default. BPD obtained separate judgments in its favor on each of the claims. Benchmark appeals, arguing the master erred in denying its motion to be relieved from the default judgment and in awarding an excessive amount of attorney's fees to BPD. We affirm. [1]
On March 17, 2005, BPD signed an Architectural and Construction Agreement to design, remodel, furnish, and equip a bank branch facility owned by Benchmark in Greenville, South Carolina. The agreement provided BPD would receive minimum compensation of $24, 000.00 for architectural services and at least $24, 000.00 for construction services.
On October 14, 2005, BPD filed a Notice of Mechanic's Lien upon the property for $16, 607.09 for labor performed and materials provided to Benchmark. The notice was accompanied by a Verification of Statement of Account signed by BPD's president. The Notice of Mechanic's Lien and the Verification of Statement of Account were served upon the registered agent for Benchmark, Charles Smith, on October 13 2005.
Smith gave the documentation to C.D. Candler, the president of Benchmark. Candler met with his attorney regarding the mechanic's lien and was reportedly instructed that he did not need to take action unless a lawsuit was filed to foreclose the lien.
On November 29, 2005, BPD filed a summons and complaint against Benchmark asserting claims for foreclosure of the mechanic's lien and breach of contract. BPD sought $16, 607.09 for the lien, plus interest, attorney's fees, and costs. On the breach of contract claim, BPD sought $61, 170.70, plus interest and costs. The same day, BPD also filed a lis pendens.
According to an Affidavit of Service, Smith was served with these pleadings on December 10, 2005. In his own affidavit, Smith admitted being served on December 10th, but stated that he thought the documents were the same as the original mechanic[']s lien, ” so he left a copy of them on Candler's desk. At that time, both Candler and Benchmark's attorney were out of the country. On January 13, 2006, having received no answer to the pleadings or request for an extension of time, BPD filed an affidavit of default.
The Honorable G.E. Welmaker filed an Order of Default and Order of Reference on February 13, 2006, finding Benchmark had not answered or otherwise filed a response to the pleadings and therefore was in default. Judge Welmaker separated the mechanic's lien and the breach of contract actions and referred the mechanic's lien claim to the Master-In-Equity for Greenville County to make findings of fact and conclusions of law; dispose of any and all issues and enter a final judgment in the case; order a judicial sale on any day...; [and] hear and dispose of any issues after sale or judgment....” In the same order, Judge Welmaker stated the claim for breach of contract has been or will be resolved by the issuance of a default judgment.” Thereafter, Judge Welmaker filed a separate Order for Judgment by Default on March 1, 2006, granting BPD a default judgment against Benchmark for $61, 170.70 for its breach of contract claim.
On March 1, 2006, BPD's attorney mailed a Notice of Hearing to Benchmark advising it that a hearing regarding the mechanic's lien claim had been scheduled before the Master-In-Equity on March 23, 2006, following which a final judgment would be issued. After receiving this notice, Candler searched his office and discovered the 2005 pleadings on his desk.
On March 21, 2006, Benchmark filed a Motion to Set Aside Default Pursuant to Rule[s] 55 and 60 of SCRCP” asking the court to set aside the default judgment on the grounds that the Defendant[']s neglect in [a]nswering the Complaint is excusable; that the Complaint does not properly and adequately verify the damages by verified statement of account; [and] even if the statement of account is proper the damages verified are patently inconsistent on their face and the [D]efendant has a meritorious defense.”
The master held a hearing regarding the claim for foreclosure of the mechanic's lien as scheduled on March 23, 2006. At the start of the hearing, BPD's counsel was made aware, for the first time, of Benchmark's motion regarding the default and stated she had not been served with a copy of it. Benchmark's attorney noted the motion was on its way” to BPD. The master stated the hearing would go on as scheduled, explaining, [A]t this point I don't have any basis to do anything other than proceed.” Benchmark's attorney expressly consented to continuation of the hearing on the foreclosure. The parties thereafter focused solely on the amount of attorney's fees that should be awarded on the mechanic's lien action, with Benchmark's attorney questioning BPD's attorney as to the basis for the amount claimed. Benchmark did not specifically dispute any of the other amounts sought in the mechanic's lien action at the hearing.
The master filed a Decree for Foreclosure of Mechanic's Lien on March 28, 2006, awarding $16, 607.09 for foreclosure of the lien, $4, 000.00 for attorney's fees, plus interest and costs, for a total judgment of $21, 974.64. The master noted the default judgment obtained for breach of contract was a separate debt owed by the Defendant, completely unrelated to the debt established herein, as secured by a mechanic's lien.” [2]
On April 6, 2006, the master held a hearing on Benchmark's motion regarding the default. The master initially discussed the fact that Benchmark's motion was made pursuant to both Rule 55 and Rule 60 of the South Carolina Rules of Civil Procedure, but the master stated he believed Rule 60 would then be applicable since the default was already entered.” None of the parties objected to the application of Rule 60, and they proceeded to argue whether excusable neglect” had been established as required under the rule. [3]
In early May 2006, the master denied Benchmark's motion for relief from the default judgment, finding Benchmark had not established excusable neglect” under Rule 60(b), SCRCP. Prior to this ruling, Benchmark had filed on April 27, 2006 a motion to alter or amend the judgment for foreclosure of the mechanic's lien, arguing the award of $4, 000.00 for attorney's fees was excessive. The master denied this motion on May 23, 2006, finding the amount of the attorney's fees awarded was appropriate.
On appeal, Benchmark argues the master abused [his] discretion in not setting aside the default” because Benchmark demonstrated it acted promptly upon receiving notice of the default judgment, its neglect was excusable, and it had a meritorious defense. [4]
The proper procedure for challenging a default judgment is to move the trial court to set aside the judgment pursuant to Rule 60(b), SCRCP.” Winesett v. Winesett, 287 S.C. 332, 334, 338 S.E.2d 340, 341 (1985). Rule 60(b)(1) of the South Carolina Rules of Civil Procedure permits a court to relieve a party from a final judgment upon a finding of mistake, inadvertence, surprise, or excusable neglect. Rule 60(b)(1), SCRCP. The movant must also show a meritorious defense. Tri-County Ice & Fuel Co. v. Palmetto Ice Co., 303 S.C. 237, 242, 399 S.E.2d 779, 782 (1990).
Whether to grant or deny a motion under Rule 60(b) lies within the sound discretion of the judge.” BB & T v. Taylor, 369 S.C. 548, 551, 633 S.E.2d 501, 502 (2006). Our standard of review, therefore, is limited to determining whether there was an abuse of discretion.” Id. at 551, 633 S.E.2d at 502-03. An abuse of discretion arises where the judge issuing the order was controlled by an error of law or where the order is based on factual conclusions that are without evidentiary support.” Id. at 551, 633 S.E.2d at 503.
A party seeking to set aside a judgment pursuant to Rule 60(b) has the burden of presenting evidence to support the claim for relief. Bowers v. Bowers, 304 S.C. 65, 67, 403 S.E.2d 127, 129 (Ct. App. 1991). In this case, Benchmark contends the judgment should be set aside for excusable neglect. Excusable neglect” is generally defined as follows:
A failure - which the law will excuse - to take some proper step at the proper time (esp. in neglecting to answer a lawsuit) not because of the party's own carelessness, inattention, or willful disregard of the court's process, but because of some unexpected or unavoidable hindrance or accident....
Black's Law Dictionary 1055 (7th ed. 1999).
In this case, the registered agent for Benchmark, Charles Smith, was served with the pleadings for foreclosure of the mechanic's lien on or about December 10, 2005. Smith incorrectly assumed these documents were the same as the original Notice of Mechanic's Lien, and he placed the pleadings on Candler's desk. The pleadings remained on Candler's desk until he discovered them several months later in March 2006, well after the time allowed for a responsive pleading. Benchmark's explanation for its failure to take any action on the pleadings is that Smith did not...
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