Karl Sitte Plumbing Co., Inc. v. Darby Development Co. of Columbia, Inc.

• Decision Date: 22 February 1988
• Docket Number: No. 1120,1120
• Citation: 295 S.C. 70,367 S.E.2d 162
• Court: South Carolina Court of Appeals
• Parties: KARL SITTE PLUMBING CO., INC., Appellant, v. DARBY DEVELOPMENT COMPANY OF COLUMBIA, INC., East Coast Builders of Columbia, Inc., and Colony Construction of Columbia, Inc., of whom East Coast Builders of Columbia, Inc., is the Respondent. . Heard

Page 162

367 S.E.2d 162

295 S.C. 70

KARL SITTE PLUMBING CO., INC., Appellant, v. DARBY DEVELOPMENT COMPANY OF COLUMBIA, INC., East Coast Builders of Columbia, Inc., and Colony Construction of Columbia, Inc., of whom East Coast Builders of Columbia, Inc., is the Respondent.

No. 1120.

Court of Appeals of South Carolina.

Heard Feb. 22, 1988.

Decided March 28, 1988.

Lourie, Curlee, Barrett & Popowski, Columbia, for appellant.

East Coast Builders of Columbia, Inc., pro se.

GOOLSBY, Judge:

This is an action by the appellant Karl Sitte Plumbing Co., Inc., against the defendants Darby Development Company of Columbia, Inc., and Colony Construction Company of Columbia, Inc., and the respondent East Coast Builders of Columbia, Inc., to foreclose a mechanic's lien and for damages for breach of contract. The circuit court consolidated the action with another and referred the consolidated action to the master in equity with authority to enter a final judgment therein. East Coast did not stipulate either in the order of reference or by a separate stipulation that the master could enter a final judgment in the cause. Also, the order of reference did not provide that any appeal from the final judgment would go directly to the Supreme Court and the parties did not consent to a direct appeal to the Supreme Court.

After the master rendered judgment against both Colony and East Coast in Karl Sitte's favor, East Coast served on Karl Sitte a notice containing exceptions to the "decision" rendered by the master. The circuit court reversed the master after making its own findings of fact. We reverse and remand.

The dispositive issue presented by Karl Sitte's appeal concerns the standard of review that the circuit court should employ in entertaining an appeal from a master's final judgment in a law case.

First, however, we must determine whether the master could properly have entered final judgment against East Coast.

The circuit judge referred the instant action on June 25, 1985. At that time, the amended form of Section 15-31-10 of the South Carolina Code of Laws (1976), which was shortly thereafter repealed and replaced by Rule 53 of the South Carolina Rules of Civil Procedure, governed references by consent of the parties. 64 STAT. Act No. 100 § 2 at 279 (1985); 61 STAT. Act No. 471 § 1 at 1401 (1980). Section 15-31-10 provided in part:

Any of the issues in an action, whether of fact or law or both, may be referred upon the written consent of the parties....... In all cases the parties ... may agree and stipulate in the order of reference or by separate stipulation that the master may enter a final judgment in the cause.

61 STAT. Act No. 471 § 1 at 1401 (1980); cf. S.C.R.CIV.P. 53(b) ("In the discretion of the court any or all issues in an action whether of law or fact, may be referred to a master by consent of the parties...."); id. 53 (e)(1) ("[I]f the parties consent in writing or the order of reference so provides, [the master] shall direct entry of judgment in the action without further order of court.").

Here, East Coast did not consent in writing to the order of reference; however it made no motion to revoke the order of reference and it participated in the reference proceedings without objecting or excepting to the order of reference or to the master's appointment, authority, or jurisdiction. East Coast, therefore, waived any objection it might have had to the action being referred. See Nichols v. Elkins, 2 Ariz.App. 272, 408 P.2d 34 (1965) (a party desiring to question the propriety of a reference should move for revocation of the reference and the failure to make such a motion constitutes acquiescence and consent to the reference); Corn Belt Products Co. v. Mullins, 172 Neb. 561, 110 N.W.2d 845 (1961) (the participation by a party in a hearing before the referee and the failure to make a timely objection to the referee's appointment precludes consideration of an objection to the referee's appointment made for the first time on appeal); Garland v. Smith, 131 Cal.App. 517, 21 P.2d 688 (1933) (an objection to a reference ordered without consent in an action to recover an amount due for work performed under a contract and for additional work not included in the contract is waived by a failure to take exception thereto, especially where the party appeared before the referee without objection and submitted evidence in support of allegations contained in his answer and counterclaim).

The question remains, however, regarding whether East Coast waived any objection it might have had to the action being referred with authority for the master to enter a final judgment therein.

East Coast participated in the reference proceedings even after the master stated in the presence of its counsel at the beginning of the proceedings that "[b]y consent of the parties, this case was referred to the master ... with authority to enter a final judgment." Moreover, after the master issued his order granting Karl Sitte "final judgment," East Coast sought an extension of time within which to file its case and exceptions and expressly based its motion on Windham v. Sanders, 287 S.C. 170, 337 S.E.2d 205 (1985), stating that the latter case "requires an appeal from a final judgment by a master-in-equity [be] to the circuit court."

Under these circumstances, we likewise hold that East Coast waived its right to attack the authority of the master to enter final judgment in the action. See Mullaney, Wells & Co. v. Savage, 31 Ill.App.3d 343, 334 N.E.2d 795 (1975) (the participation by a party in hearings before the master constituted a waiver of objection to the master's authority); Coyner v. United States, 103 F.2d 629 (7th Cir.1939) (where the defendant questioned the extent of the court's power to order a compulsory reference in a law case for the first time on appeal, the court held that the proper practice would be to move the trial court for revocation of the reference and the defendant's failure to make such a motion was tantamount to acquiescence and consent to the reference); Stewart v. Stoval, 202 Ky. 367, 259 S.W. 721 (1924) (an objection to a void order of reference held waived).

A clearer case for waiver is made when it is realized that on July 1, 1985, just six days after the circuit court entered its order referring the instant action to the master, Section 15-31-10, as we noted above, was repealed and the South Carolina Rules of Civil Procedure took effect. See S.C.R.CIV.P. 86(a). The new rules thereafter governed all further proceedings in the instant action since their application, as we view the record, was feasible and would not work an injustice to any of the parties. Id.; see Hinson-Barr, Inc. v. Pinckard, 292 S.C. 267, 356 S.E.2d 115 (1987) (Ness, C.J., dissenting) (viewing the South Carolina Rules of Civil Procedure as applicable to an action commenced prior to the effective date of the rules but still pending on that date); Burnsed v. Greene, 291 S.C. 59, 351 S.E.2d 910 (Ct.App.1986) (holding the circuit court erred in not applying the new rules of civil procedure to an action filed before their effective date in determining an issue involving joinder of claims where there was no finding by the court that it would not be feasible or would work an injustice to apply the new rules and the record did not suggest any reason why they should not apply). Under Rule 53(e)(1), the circuit court has the authority, which it did not have under Section 15-31- 10, to direct in the order of reference the "entry of judgment in the action without further order of the court," i.e., the entry of final judgment, irrespective of the parties' consent.

As we stated, the order of reference expressly authorized the master to enter final judgment and East Coast participated in the hearing before the master after the adoption of the new rules with full knowledge of the provision in the order of reference authorizing the entry of final judgment by the master. Had East Coast at the reference hearing objected to the master's authority to enter final judgment in the cause because it had not consented to the reference and to the entry of final judgment by the master, the question could have been resolved quickly by the master's allowing Karl Sitte, pursuant to Rule 53(e)(1) and with notice to East Coast, to apply to the circuit court for an order authorizing the master to enter final judgment.

We turn now to the question of the standard of review that the circuit court must apply in determining an appeal from a final judgment in a law case heard by a master. The circuit court held that it could review both findings of fact and conclusions of law in such cases. We disagree.

In South Carolina, an action to foreclose a mechanic's lien is a law case. Metz v. Critcher, 83 S.C. 396, 65 S.E. 394 (1909). An action for damages for breach of contract is also an action at law. Airfare, Inc. v. Greenville Airport Commission, 249 S.C. 265, 153 S.E.2d 846 (1967). We held in May v. Hopkinson, 289 S.C. 549, 347 S.E.2d 508 (Ct.App.1986), that, in the absence of a statute prescribing a different standard of review, the circuit court in reviewing the final judgment entered by a master in a law case must apply the same standard of review that either this court or the Supreme Court would apply in such a case.

The circuit court questions the accuracy of this holding, pointing to and bottoming its views on Article V, Section 11 of the South Carolina Constitution, Sections 18-7-10 and 18-7-170 of the South Carolina Code of Laws (1976), and Rule 53(e)(2) of the new rules.

Article V, Section 11 provides that the circuit court "shall have such appellate jurisdiction as provided by...