Carolina First Bank v. Badd, LLC

• Citation: 400 S.C. 343,733 S.E.2d 619
• Decision Date: 21 December 2012
• Docket Number: No. 5041.,5041.
• Court: South Carolina Court of Appeals
• Parties: CAROLINA FIRST BANK, n/k/a TD Bank, NA, Respondent, v. BADD, LLC, William McKown, and Charles A. Christenson, Defendants, Of whom BADD, LLC and William McKown are Appellants. BADD, LLC and William McKown, Third–Party Plaintiffs, v. William Rempher, Third–Party Defendant. Appellate Case No. 2011–187747.

400 S.C. 343
733 S.E.2d 619

CAROLINA FIRST BANK, n/k/a TD Bank, NA, Respondent,
v.
BADD, LLC, William McKown, and Charles A. Christenson, Defendants,
Of whom BADD, LLC and William McKown are Appellants.
BADD, LLC and William McKown, Third–Party Plaintiffs,
v.
William Rempher, Third–Party Defendant.
Appellate Case No. 2011–187747.

No. 5041.

Court of Appeals of South Carolina.

Heard Sept. 13, 2012.
Decided Oct. 24, 2012.
Rehearing Denied Dec. 21, 2012.

Appeal From Horry County; Steven H. John, Circuit Court Judge.
Richard R. Gleissner, of Gleissner Law Firm, LLC, of Columbia, for Appellants.

William Wayne DesChamps, III, of DesChamps Law Firm, of Myrtle Beach, for Respondent.

WILLIAMS, J.

[400 S.C. 344]BADD, LLC (BADD) and William McKown appeal the circuit court's order referring the instant case to the master-in-equity (master), arguing the circuit court erred in (1) referring Carolina First Bank's (Carolina First) claim against McKown as guarantor to the master based on its finding that the main purpose of the action was equitable in nature; and (2) referring BADD and McKown's counterclaims to the master based on its finding that those claims were permissive counterclaims asserted in an equitable action and, thus, that BADD and McKown waived their right to a jury trial on those claims. We reverse.

I. FACTS

On March 14, 2008, Charles Christenson and McKown, as members of and on behalf of BADD, executed a promissory note and mortgage to obtain financing for the acquisition of income-producing real estate. McKown also executed a guaranty at the same time, personally guaranteeing performance and payment of the promissory note. On April 1, 2008, Christenson and McKown, again on behalf of BADD, executed another promissory note and mortgage to obtain additional financing for income-producing real estate (collectively Notes and Mortgages). McKown executed a second guaranty on the same day (collectively Guaranties). In 2009, Christenson began experiencing financial problems and sought McKown's consent to allow William Rempher to buy his interest in BADD and assume responsibility for the operations of BADD. McKown agreed to the arrangement, and Rempher became a member of BADD.

On September 9, 2010, Carolina First filed an action against BADD seeking judgment for the full amount owed on the Notes and Mortgages and foreclosure and sale of the properties secured by the Mortgages. In addition, Carolina First sought a judgment against McKown, as guarantor of the Notes and Mortgages, for payment of the residue of the [400 S.C. 345]mortgage indebtedness, if any, remaining unsatisfied after the judicial sale of the properties. In response, McKown demanded a jury trial on Carolina First's claim against him based on the Guaranties and, along with BADD, filed several counterclaims against Carolina First, including civil conspiracy, breach of contract, and a claim seeking a determination that the Guarantees were unconscionable and, thus, unenforceable. In

[733 S.E.2d 620]

addition, McKown impleaded Rempher as a third-party defendant by alleging causes of action against him for civil conspiracy,...