Fesmire v. Digh

• Citation: 683 S.E.2d 803,385 S.C. 296
• Decision Date: 20 May 2009
• Docket Number: No. 4549.,4549.
• Parties: Larry Lee FESMIRE, Jr., and Teresa M. Fesmire, Respondents, v. George B. DIGH, Appellant.
• Court: Court of Appeals of South Carolina

683 S.E.2d 803

385 S.C. 296

Larry Lee FESMIRE, Jr., and Teresa M. Fesmire, Respondents, v. George B. DIGH, Appellant.

No. 4549.

Court of Appeals of South Carolina.

Heard February 19, 2009.

Decided May 20, 2009.

J. Dwight Hudson and Mary Anne Graham, both of Myrtle Beach, for Appellant.

Otis Allen Jeffcoat, III, of Myrtle Beach, Ezizze Davis Foxworth, of Loris, and James B. Richardson, Jr., of Columbia, for Respondents.

GEATHERS, J.

This is an appeal from an order granting specific performance of an alleged oral contract for the sale of Appellant George Digh's interest in a condominium to Respondents Larry Fesmire, Jr., and Teresa Fesmire. We reverse the master's order and remand the case for an accounting and partition by sale.

FACTS/PROCEDURAL HISTORY

In 1990, the parties to this action, along with Shelley Digh, jointly purchased a Myrtle Beach condominium from Shelley's employer, B.W. Miller. Shelley, who is now deceased, was the wife of George Digh. The two couples were longtime friends who took trips together. They executed a promissory note to Miller in the amount of $85,000 and a mortgage on the property to secure the note. They also entered into a written agreement among themselves setting forth their understanding of their respective ownership interests in the property, the division of the property's income and expenses, and the disposition of their respective interests in the property in the event of a future sale. They intended to use the condominium as rental property and also for their occasional personal use.

Shelley, who was an accountant, kept the financial records on the property. From July 1990 through April 1996, she sent mortgage payments to Miller. On a quarterly basis, she determined the amount of income collected and total expenses for the property and notified Larry Fesmire if any funds were due from him at that time.

In February 1994, Shelley was diagnosed with acute myeloblastic leukemia. From that point forward, the Dighs' personal use of the condominium significantly diminished. The leukemia went into remission, and Shelley had a bone marrow transplant; but in January 1996, the Dighs learned that the leukemia had returned. When they were about to exhaust health insurance coverage for Shelley's medical expenses, the Dighs learned that they would have to raise $250,000 for a second bone marrow transplant. Among their options for fund-raising was a proposal for the Fesmires to purchase the Dighs' interest in the Myrtle Beach condominium. George Digh's understanding of the proposal was that both couples would agree on a value of $140,000 for the condominium, with $70,000 attributable to each couple's interest in the property, provided that the sale closed within thirty days. According to George, the Dighs wanted to impose a thirty-day deadline because time was of the essence in raising funds for the bone marrow transplant. George understood that the amount due, after subtracting the Fesmires' share of the existing debt on the property, was approximately $37,000. However, no formal closing ever occurred.

According to Larry Fesmire, the proposal that Shelley submitted to him was for a net amount due of $20,000 for the Dighs' interest in the property. Larry Fesmire's account of events includes his payment of $20,000 in cash to Shelley during a visit to the Dighs' home in April 1996. He allegedly used a cigar box to carry the $20,000 in $100 denominations to Shelley's bedroom where she was lying ill, and he allegedly placed the box on Shelley's dresser.

Shelley's last mortgage payment was the April 1996 payment. In May 1996, the Fesmires took over the mortgage payments and started paying for all of the other expenses associated with the property. In July 1996, Shelley died.

In April 1998, George Digh wrote a letter to Larry Fesmire indicating his impression that Fesmire had never completed the purchase of Digh's interest in the Myrtle Beach condominium. Digh expressed his desire for Fesmire to complete the purchase of his interest or for the condominium to be placed on the market for sale. A few days later, Fesmire responded to the letter with two alternative proposals: (1) complete the "original agreement of March 1996" by paying what Fesmire considered to be the balance due on the net purchase price—$70,000 less the $20,000 "down payment paid in March of 1996," less Fesmire's share of the debt on the property as of March 1996 ($33,000), for a net amount due of $17,000; or (2) place the condominium on the market. Fesmire indicated his preference for the option of buying out Digh's interest. Digh responded with confusion over Fesmire's mention of a $20,000 payment.

The parties engaged in several unsuccessful efforts to resolve the matter, and the Fesmires eventually stopped making the mortgage payments on the Myrtle Beach condominium; therefore, Digh had to take up payments on the mortgage to prevent foreclosure.¹ The Fesmires later filed an action against Digh seeking specific performance of an alleged oral contract for the sale of the Dighs' interest in the condominium for $20,000. The Fesmires alleged that before Shelley's death, they had entered into an oral contract with George and Shelley Digh for the sale of the Dighs' interest in the condominium. The complaint also requested the alternative remedies of a partition and sale of the property and an accounting. Digh filed a counterclaim seeking damages for conversion and seeking an accounting. The matter was referred to the master-in-equity, who conducted a bench trial and later issued an order granting specific performance of the alleged oral contract. Digh filed a motion for reconsideration, but the master denied the motion. This appeal followed.

ISSUES ON APPEAL

I. Did the master err in admitting into evidence redacted versions of two letters authored by counsel for the purpose of settlement negotiations?

II. Did the master err in granting specific performance of the alleged oral contract in violation of the Statute of Frauds, S.C.Code Ann. § 32-3-10(4) (2007)?

III. Did the master err in failing to grant the parties' requests for a partition and an accounting?

STANDARD OF REVIEW

This Court reviews all questions of law de novo. E.g., Fields v. J. Haynes Waters Builders, Inc., 376 S.C. 545, 564, 658 S.E.2d 80, 90 (2008). Review of the trial court's factual findings, however, depends on the whether the underlying action is an action at law or an action in equity. See Townes Assocs. Ltd. v. City of Greenville, 266 S.C. 81, 85-86, 221 S.E.2d 773, 775-76 (1976) (setting forth standards of review to apply in actions at law and actions in equity).

In an action at law, the trial court's factual findings will not be disturbed upon appeal unless found to be without evidence which reasonably supports the trial court's findings. Townes, 266 S.C. at 86, 221 S.E.2d at 775. In an action in equity, the appellate court may resolve questions of fact in accordance with its own view of the preponderance of the evidence. See Wilder Corp. v. Wilke, 324 S.C. 570, 577, 479 S.E.2d 510, 513 (Ct. App.1996) (citing Townes, 266 S.C. at 86, 221 S.E.2d at 775) (holding that because the master-in-equity heard the action, which was equitable in nature, without appeal to the circuit court, the appellate court could find the facts on appeal in accordance with its own view of the preponderance of the evidence). However, this broad scope of review does not require this Court to disregard the findings at trial or to ignore the fact that the master was in a better position to assess the credibility of the witnesses. Laughon v. O'Braitis, 360 S.C. 520, 524-25, 602 S.E.2d 108, 111 (Ct.App.2004).

To determine whether an action is legal or equitable, this Court must look to the action's main purpose as reflected by the nature of the pleadings, evidence, and character of the relief sought. Ex parte Wheeler v. Estate of Green, 381 S.C. 548, 673 S.E.2d 836, 839 (Ct.App.2009). Here, the Fesmires have asserted causes of action for specific performance of an alleged oral contract, a partition, and an accounting.² Our appellate courts have traditionally viewed the main purpose of each of these causes of action as the pursuit of equitable relief and thus have found these causes of action to be equitable in nature. See Ingram v. Kasey's Assocs., 340 S.C. 98, 105, 531 S.E.2d 287, 290-91 (2000) (applying the equitable standard of review to the trial court's findings of fact in a specific performance action); Lowcountry Open Land Trust v. Charleston S. Univ., 376 S.C. 399, 406, 656 S.E.2d 775, 779 (Ct.App. 2008) (holding that an action for specific performance lies in equity); Laughon, 360 S.C. at 524, 602 S.E.2d at 110 (holding that a partition action as well as an action for accounting is an action in equity); Settlemeyer v. McCluney, 359 S.C. 317, 320, 596 S.E.2d 514, 516 (Ct.App.2004) (applying equitable standard of review to action for specific performance of an alleged oral contract for the conveyance of land); Parker v. Shecut, 340 S.C. 460, 478, 531 S.E.2d 546, 556 (Ct.App. 2000), rev'd on other grounds, 349 S.C. 226, 562 S.E.2d 620 (2002), (holding that an action for specific performance lies in equity). Therefore, this Court may review the factual findings in the instant case in accordance with its own view of the preponderance of the evidence.

This case is distinguishable from McGill v. Moore, 381 S.C. 179, 672 S.E.2d 571 (2009), in which our Supreme Court applied the legal standard of review to the trial court's findings of fact in an action for specific performance of three written contracts for the sale of land. Because the contracts were in writing, their existence was not in dispute and the statute of frauds was not raised as a defense. Rather, before determining the suitability of specific performance as a remedy, the Court was required to interpret the written provisions of the contracts. Therefore, the Court determined that the action was an ...