Ex Parte Capital U-Drive-It, Inc., 26147.

• Decision Date: 08 May 2006
• Docket Number: No. 26147.,26147.
• Court: South Carolina Supreme Court
• Parties: Ex parte CAPITAL U-DRIVE-IT, INC., Respondent. In re Michelle Wallace, f/k/a Michelle Beaver, v. Rhett Alexander Beaver, Appellant.

630 S.E.2d 464

Ex parte CAPITAL U-DRIVE-IT, INC., Respondent In re Michelle Wallace, f/k/a Michelle Beaver, v. Rhett Alexander Beaver, Appellant.

No. 26147.

Supreme Court of South Carolina.

Heard February 15, 2006.

Decided May 8, 2006.

COPYRIGHT MATERIAL OMITTED

John D. Delgado and Kathrine H. Hudgins, both of Columbia, for Appellant.

Todd R. Ellis and Jonathan M. Milling, both of Smith Ellis & Stuckey, P.A., of Columbia, for Ellis, of Columbia, for Respondent.

Justice BURNETT:

In this appeal, we are asked to decide (1) whether an order unsealing a court record is immediately appealable and (2) whether the family court judge properly unsealed the record of a divorce proceeding in a limited manner at the request of a litigant in an unrelated civil action who is seeking information about the financial affairs of one of the divorce litigants.

In April 2002 the record of the divorce proceeding between Michelle W. Beaver and Rhett A. Beaver was sealed with the consent of the parties. A month later, Rhett Beaver (Beaver) pled guilty to an indictment charging him with mail fraud and agreed to forfeit certain personal property and cooperate with government officials investigating the matter. The indictment stemmed from Beaver's participation in an embezzlement scheme which defrauded Capital-U-Drive-It, Inc. (Capital), his employer, of some $551,864.

Capital brought a civil action in Lexington County Court of Common Pleas in 2002 against Beaver and his parents, Sylvia Beaver and the Estate of George Beaver, in an effort to recover embezzled funds. Capital moved before the family court to unseal the record of Beaver's divorce proceeding, asking for permission to review and copy all information in the file pertaining to Beaver's financial affairs. Another family court judge granted Capital's motion and unsealed the record. The judge granted permission for Capital to inspect and copy all documents "wherein representations are made regarding money and assets earned, received or obtained by Rhett Beaver during the marriage, including but not limited to, representations regarding the amount and sources of income and what funds were obtained from Capital that were made in the divorce proceeding by Rhett Beaver, George Beaver, Sylvia Beaver or any other party making such declarations."

Beaver appealed. We certified this case for review from the Court of Appeals pursuant to Rule 204(b), SCACR.

ISSUES

I. Is the order unsealing the record of a family court proceeding immediately appealable in this case?

II. Did the family court judge err in unsealing the record of a divorce proceeding in a limited manner at the request of a litigant in an unrelated civil action who is seeking information about the financial affairs of one of the divorce litigants?

STANDARD OF REVIEW

A trial court order pertaining to the sealing or unsealing of the record of a court proceeding is reviewed for abuse of discretion. See Nixon v. Warner Communications, Inc., 435 U.S. 589, 599, 98 S.Ct. 1306, 1312-13, 55 L.Ed.2d 570 (1978); Virginia Dept. of State Police v. Washington Post, 386 F.3d 567, 575 (4th Cir.2004); Siedle v. Putnam Investments, Inc., 147 F.3d 7, 10 (1st Cir.1998); Providence Journal Co. v. Clerk of the Family Court, 643 A.2d 210, 211 (R.I. 1994); A.P. v. M.E.E., 354 Ill.App.3d 989, 290 Ill.Dec. 664, 821 N.E.2d 1238, 1245 (1 Dist. 2004). An abuse of discretion occurs when the judge's ruling is based upon an error of law, such as application of the wrong legal principle; or, when based upon factual conclusions, the ruling is without evidentiary support; or, when the judge is vested with discretion, but the ruling reveals no discretion was exercised; or when the ruling does not fall within the range of permissible decisions applicable in a particular case. Fontaine v. Peitz, 291 S.C. 536, 539, 354 S.E.2d 565, 566 (1987); S.E.C. v. TheStreet.Com, 273 F.3d 222, 229 n. 6 (2d Cir.2001).

In a case raising a novel question of law, the appellate court is free to decide the question with no particular deference to the lower court. I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 411, 526 S.E.2d 716, 719 (2000) (citing S.C. Const. art. V, §§ 5 and 9, S.C.Code Ann. § 14-3-320 and -330 (1976 & Supp. 2005), and S.C.Code Ann § 14-8-200 (Supp.2005)); Osprey, Inc. v. Cabana Ltd. Partnership, 340 S.C. 367, 372, 532 S.E.2d 269, 272 (2000) (same); Clark v. Cantrell, 339 S.C. 369, 378, 529 S.E.2d 528, 533 (2000) (same).

LAW AND ANALYSIS

I. APPEALABILITY OF ORDER UNSEALING FAMILY COURT RECORD

Beaver argues the order to unseal the record of a divorce proceeding is immediately appealable because, under the facts of this case, it is a final order issued by the family court which stands separate and apart from the civil lawsuit pending in circuit court between Capital and Beaver. Beaver relies on S.C.Code § 14-3-330(1) (1976). We agree.

The right of appeal arises from and is controlled by statutory law. N.C. Fed. Sav. and Loan Assn. v. Twin States Dev. Corp., 289 S.C. 480, 347 S.E.2d 97 (1986). An appeal ordinarily may be pursued only after a party has obtained a final judgment. Mid-State Distributors, Inc. v. Century Importers, Inc., 310 S.C. 330, 335, 426 S.E.2d 777, 780-81 (1993); S.C.Code Ann. § 14-3-330(1) (1976); Rule 72, SCRCP; Rule 201(a), SCACR.

The determination of whether a party may immediately appeal an order issued before or during trial is governed primarily by S.C.Code Ann. § 14-3-330 (1976 & Supp. 2005). Absent a specialized statute, an order must fall into one of several categories set forth in Section 14-3-330 in order to be immediately appealable. Hagood v. Sommerville, 362 S.C. 191, 195, 607 S.E.2d 707, 708 (2005); Baldwin Constr. Co. v. Graham, 357 S.C. 227, 593 S.E.2d 146 (2004); Woodard v. Westvaco Corp., 319 S.C. 240, 242, 460 S.E.2d 392, 393 (1995), overruled on other grounds, Sabb v. S.C. State Univ., 350 S.C. 416, 567 S.E.2d 231 (2002); Mid-State Distributors, 310 S.C. at 333 n. 3, 426 S.E.2d at 780 n. 3.

An order "involves the merits," as that term is used in Section 14-3-330(1)¹ and is immediately appealable when it finally determines some substantial matter forming the whole or part of some cause of action or defense. Peterkin v. Brigman, 319 S.C. 367, 461 S.E.2d 809 (1995); Mid-State Distributors, 310 S.C. at 334, 426 S.E.2d at 780; Knowles v. Standard Savings & Loan Assn., 274 S.C. 58, 261 S.E.2d 49 (1979). The phrase "involving the merits" is narrowly construed in modern precedent. An order usually will be deemed interlocutory and not immediately appealable when there is some further act that must be done by the trial court prior to a determination of the parties' rights. Mid-State Distributors, 310 S.C. at 334-335, 426 S.E.2d at 780 (order denying motion to dismiss case based on lack of personal jurisdiction was not immediately appealable, as the litigant had "not arrived at the end of the road"); Peterkin, 319 S.C. 367, 461 S.E.2d 809 (order denying motion to enforce alleged settlement agreement was not immediately appealable); Tatnall v. Gardner, 350 S.C. 135, 138, 564 S.E.2d 377, 379 (Ct.App.2002) (order denying motion to amend pleadings to assert third party claims was not immediately appealable because the order did not determine a substantial matter forming the whole or part of some cause of action).

In the present case, the order issued by the family court unsealing the record determined a substantial matter forming the whole or part of the family court proceeding in which Capital sought access to the record of the Beavers' divorce. No further action is required in the family court to determine the parties' rights; therefore, the order is immediately appealable under Section 14-3-330(1).

Moreover, we agree with courts which have been inclined to find such an order immediately appealable because, after a court file is unsealed and the information released, no appellate remedy is likely to repair any damage done by an improper disclosure. "Compelling a party that disputes an unsealing order to forgo an appeal until the conclusion of the underlying litigation would let the cat out of the bag, without any effective way of recapturing it if the district court's directive was ultimately found to be erroneous." Siedle v. Putnam Investments, Inc., 147 F.3d 7, 9 (1st Cir.1998) (quoting Irons v. FBI, 811 F.2d 681, 683 (1st Cir.1987)). These courts also explain that the usual method of reaching an appellate court—being held in contempt for refusal to comply—is not available to a litigant when the court chooses to unseal its own records. See Virginia Dept. of State Police v. Washington Post, 386 F.3d 567, 574 n. 4 (4th Cir.2004) (order unsealing district court documents may be immediately appealed under collateral order doctrine applicable in federal courts); S.E.C. v. TheStreet.com, 273 F.3d 222, 228 (2d Cir.2001) (same); Siedle, 147 F.3d at 9 (same).²

Beaver also argues that, if the family court order is viewed as a discovery-related order issued in connection with the civil action in circuit court, then it is immediately appealable because it affects a substantial right pursuant to S.C.Code Ann. § 14-3-330(2) (1976). It is unnecessary to address this argument under the facts of this case.

We conclude the order to unseal the record of the family court proceeding, under the facts of this case, is immediately appealable pursuant to Section 14-3-330(1).

II. UNSEALING RECORD OF DIVORCE PROCEEDING

Appellant argues the family court judge erred in unsealing the record of his divorce proceeding at the request of Capital, which seeks financial information about Appellant for potential use in an unrelated civil action Capital has filed against him. Appellant argues the family court judge who initially sealed the record acted properly and his decision should remain in effect. Although Appellant concedes court records usually are open and public, he contends the privacy rights of family court litigants outweigh the...