Lowcountry v. Charleston Southern Univ.

• Decision Date: 16 January 2008
• Docket Number: No. 4336.,4336.
• Citation: 656 S.E.2d 775,376 S.C. 399
• Parties: LOWCOUNTRY OPEN LAND TRUST, Respondent, v. CHARLESTON SOUTHERN UNIVERSITY, Appellant.
• Court: South Carolina Court of Appeals

656 S.E.2d 775

376 S.C. 399

LOWCOUNTRY OPEN LAND TRUST, Respondent, v. CHARLESTON SOUTHERN UNIVERSITY, Appellant.

No. 4336.

Court of Appeals of South Carolina.

Heard November 7, 2007.

Decided January 16, 2008.

Stephen L. Brown and Edward Buckley, Jr., both of Charleston, for Appellant.

G. Dana Sinkler, of Charleston, for Respondent.

KITTREDGE, J.

Charleston Southern University (the University) and Lowcountry Open Land Trust (Buyer) entered into a contract for the sale and purchase, respectively, of real property in Dorchester County, South Carolina. The University is the principal, but not sole, owner of the real property. The University attempted to terminate the contract, resulting in an action by Buyer for specific performance. The master-in-equity rescinded the University's purported termination of the contract and ordered the parties to renegotiate their contract and enter into a "written extension agreement." The purpose of the extension agreement was to provide additional time within which to ascertain the varying, ownership interests of the multiple property owners. The University appeals. We affirm the master only insofar as the University's interest in the property is concerned. We reverse that portion of the order requiring the parties to renegotiate their contract. The result of our holding is to grant specific performance as to the University's undivided interest in the property.

I.

The University and Buyer entered into the contract on October 27, 2004, for approximately 63.38 acres of land located near Summerville in Dorchester County, South Carolina. The University represented that it owned 61.70% of the property, and provided the Buyer a list of twenty-seven other institutions and individual owners that it believed held the remaining interest.¹ The contract called for a total purchase price of $325,000, payable to each individual owner agreeing to the sale, including the University, in an amount to be determined in accordance with each owner's interest in the property.

Both the University and Buyer were aware of the unusual title and ownership issues. Therefore, the contract provided various options in the event Buyer was unable to obtain the complete ownership interest in the property. For example, in the event there were any deficiencies in title, Buyer could give notice to the University to cure such deficiencies. If the University was unable or unwilling to cure the claimed defects in title, or "in the failure of any Buyer's contingency described," Buyer could elect to cancel the contract or to "[a]ccept such title and/or condition of Property as [the University] can convey as performance in full." Thus, in the event Buyer was unable to obtain deeds conveying the full ownership interest from the remaining owners, Buyer could cancel the contract or take a deed from the University for its undivided interest in the property. Moreover, Buyer could purchase the interest of other property owners who would be willing to convey their ownership interest to Buyer. In this regard, to help determine title, the University agreed to contact the other owners and attempt to obtain their agreement to sell their interest in the property.²

The contract also included two timeline provisions: (1) an "inspection Period," which was to last for sixty days from the October 29, 2004 delivery date of the contract; and (2) a "Title Examination Period," which was to begin on the expiration of the Inspection Period and continue until the thirtieth day thereafter. The contract further provided that the closing date should take place "on or before the expiration date of the Title Examination Period (or the first business day thereafter if such date shall be a Saturday, Sunday or legal holiday) at the office of Buyer's attorney, or at such other date or place as the parties may agree in writing." The parties agreed the Title Examination Period expired no later than January 31, 2005. Thus, the projected closing date was January 31, 2005. The contract did not include a "time is of the essence" provision.

Once the parties signed the contract, both the University and Buyer undertook efforts to verify the other owners of the property. On October 28, 2004, Buyer contacted Sidney Jones, a title abstractor, to perform the title search. Shortly after Jones received the order, Jones told Buyer that he could not complete the work in the time required due to his busy schedule and the number of owners he would have to research. Meanwhile, the University mailed a letter to all known owners asking for information as to how they acquired title to the property and seeking their consent to the sale of their property interest under the contract. On or about January 17, 2005, the parties discussed the status of consents the University had received from the other owners.³ The projected closing date of January 31, 2005 passed without the parties closing on the contract.

On March 11, 2005, Sue Mitchell, Vice President for Business Affairs at the University, directed William Bates, the University's attorney, to check on the status of the contract so she could make a report to the University's Board of Trustees at the next scheduled board meeting. Bates contacted John Warren, III, Buyer's attorney, who advised Bates that Buyer was waiting for the completed title work. Later that same day, Warren e-mailed Bates requesting an extension of the contract. Bates forwarded the request to Mitchell, who in return directed Bates to issue a letter terminating the contract.

Bates sent a termination letter to Buyer on March 23, 2005. Buyer responded by filing this declaratory judgment action seeking specific performance on April 11, 2005. Notwithstanding the filing of this declaratory judgment action, on April 13, 2005, Bates delivered to Warren a copy of a Trust Agreement with respect to the property. The next day, Warren wrote to acknowledge receipt, stating he would forward the document to Buyer's title examiner and he hoped this would be "just what we have been looking for to help establish the current ownership."

On May 5, 2005, Buyer tendered a check to the University for $190,525 to purchase the interest owned by the University. The tendered check of $190,525 plus $10,000 in earnest money Buyer had previously paid equaled $200,525, which is 61.70% of the total purchase price of $325,000. The University did not accept the money and refused to quitclaim its interest in the property to Buyer.

The case proceeded to trial. In his final order, the master found (1) the contract did not include a "time was of the essence" provision, and (2) the University had waived its right to enforce the closing date based on its actions after January 31, 2005. As a result, the master rescinded the University's termination of the contract and ordered the parties to renegotiate an extension of the contract. The University appeals.

II.

Buyer filed a declaratory judgment action. "A suit for declaratory judgment is neither legal nor equitable, but is determined by the nature of the underlying, issue." Felts v. Richland County, 303 S.C. 354, 356, 400 S.E.2d 781, 782 (1991). To make this determination, the appellate court must look to the essential character of the cause of action. Barnacle Broad., Inc. v. Baker Broad., Inc., 343 S.C. 140, 146, 538 S.E.2d 672, 675 (Ct. App.2000). The character of the action is generally ascertained from the body of the complaint, but when necessary, "resort may also be had to the prayer for relief and any other facts and circumstances which throw light upon the main purpose of the action." Ins. Fin. Servs., Inc. v. S.C. Ins. Co., 271 S.C. 289, 293, 247 S.E.2d 315, 318 (1978); In re Estate of Holden, 343 S.C. 267, 278, 539 S.E.2d 703, 709 (2000) (citing Bell v. Mackey, 191 S.C. 105, 119, 3 S.E.2d 816, 824 (1939) ("The nature of the issues as raised by the pleadings or the pleadings and proof, and character of relief sought under them, determines the character of an action as legal or equitable)).

In this case, Buyer primarily asserted a claim for specific performance.⁴ An action for specific performance lies in equity. Ingram v. Kasey's Assocs., 340 S.C. 98, 105, 531 S.E.2d 287, 290 (2000). In an appeal from an action in equity, tried by a judge alone, this court may find facts in accordance with its own view of, the preponderance of the evidence. Barnacle Broadcasting, Inc., 343 S.C. at 146, 538 S.E.2d at 675.

III.

A. Specific Performance

The University claims the master erred in rescinding its termination of the contract because Buyer was not ready, willing, and able to perform its obligations under the contract on the closing date. We disagree insofar as the University's undivided interest in the property is concerned. We agree with the master that Buyer's failure to close on the projected closing date did not entitle the University to terminate the contract because time was not of the essence under the contract. It is well settled that time is not of the essence in a contract to convey land unless made so by its terms expressly or by implication. Faulkner v. Millar, 319 S.C. 216, 219, 460 S.E.2d 378, 380 (1995). "When the contract does not include a provision that `time is of the essence,' the law implies that it is to be done within a reasonable time." Id. Under the circumstances presented here, Buyer had a reasonable time to complete performance of the contract.

The master's decision to rescind the University's termination of the contract is buttressed by other provisions in the contract and the conduct of the parties after January 31, 2005. For example, the contract included a provision allowing the parties to agree to an alternative closing date. Further, the conduct of the University after the projected closing date shows that the University did not believe time was of the essence. More than a month after the projected closing date, University Vice President Mitchell contacted Bates about the contract....