Lyons v. Fid. Nat'l Title Ins. Co.
| Decision Date | 02 December 2015 |
| Docket Number | Appellate Case No. 2013–002137.,No. 5365.,5365. |
| Parties | Thomas P. and Desiree J. LYONS, Respondents, v. FIDELITY NATIONAL TITLE INSURANCE COMPANY as successor by merger to Lawyers Title Insurance Corporation, Bobby Gene Martin, and The Security Title Guarantee Corporation of Baltimore, Defendants, Of whom The Security Title Guarantee Corporation of Baltimore is the Appellant. |
| Court | South Carolina Court of Appeals |
Ray Coit Yarborough Jr., of Florence, for appellant.
David K. Haller, of Haller Law Firm, of Charleston, for respondents.
The Security Title Guarantee Corporation of Baltimore (Security Title) appeals the circuit court's grant of partial summary judgment in favor of Thomas P. Lyons and Desiree J. Lyons (collectively, the Lyons). Security Title argues the circuit court erred in (1) finding the Lyons' claims were not barred by the statute of limitations; (2) holding a county "no-build" resolution appeared in the public record and was available for title examination when the policy was issued; (3) holding a zoning resolution imposing a land restriction was a defect in title triggering coverage under the policy; (4) finding the Lyons did not fail to mitigate their damages; and (5) determining the date of loss. We affirm.
The real property (the Property) at issue is a residential lot located in Horry County, which previously held a mobile home with numerous extensions and additions. Unbeknownst to the Lyons at the time of their purchase, the Property had been encumbered since 1932 by a properly recorded easement allowing for the construction and maintenance of the Intracoastal Waterway. Moreover, the Property has been subject to a county "no-build" resolution since 2003.
The Lyons purchased the Property in two separate transactions. On May 5, 2005, they purchased a lot (Lot 1) for $240,000, along with a title insurance policy from Lawyers Title Insurance Corporation (Lawyers Title).1 On October 28, 2005, the Lyons purchased a portion of a lot (Lot 2) adjacent to Lot 1 for $100,000. In conjunction with this transaction, they purchased a title insurance policy from Security Title.2 Lots 1 and 2 were subsequently combined into the Property at issue, which is shown as "Lot 1" on a plat dated August 24, 2005, and recorded with the Horry County Register of Deeds.
On July 3, 1930, Congress enacted the River and Harbor Act, which provided for the construction of the Atlantic Intracoastal Waterway.3 In 1931, our General Assembly passed an act to provide for rights-of-way for the construction project.4 On August 17, 1932, the governor executed a deed to rights of way (Spoil Easement), which granted the federal government the following:
[T]he perpetual right and easement to enter upon, excavate, cut away and remove any and all of the tracts hereinafter described as composing a part of the canal prism,[5 ] as may be required at any time for construction and maintenance of the said Inland Waterway ... and ... to enter upon, occupy, and use any portion of ... the spoil disposal area [6 ]... [and] to deposit on the ... spoil disposal area, or any portion thereof, any and all spoil or other material excavated in construction and maintenance of the aforesaid waterway and its appurtenances.
The Spoil Easement was filed in the Horry County Register of Deeds on September 17, 1932.
Horry County Res. 143–03. In May 2011, Horry County refused to issue the Lyons a building permit due to the no-build resolution. The Lyons assert that when their building permit was refused, "they learn[ed] for the first time that there is an easement on the property[,] which essentially makes their property useless." Thereafter, they removed the existing mobile home structure from the Property and listed the Property for sale for $539,000.
The Lyons subsequently submitted claims against Fidelity and Security Title under their title insurance policies. On October 11, 2011, Security Title denied the Lyons' claim and rejected their $80,000 demand. The Lyons filed an action for breach of contract and bad faith failure to pay insurance claims on July 5, 2012, followed by an amended summons and complaint on July 19, 2012. The Lyons subsequently moved for partial summary judgment on December 20, 2012.
At the May 15, 2013 summary judgment hearing, the Lyons brought to the circuit court's attention that United States District Court Judge R. Bryan Harwell had granted partial summary judgment for a neighboring insured on the liability question in a similar case. See Whitlock v. Stewart Title Guar. Co., 2011 WL 4549367 (D.S.C. Oct. 3, 2011).7 The circuit court granted the Lyons' motion for partial summary judgment by order filed July 12, 2013. Security Title moved to reconsider on July 26, 2013; the circuit court denied the motion to reconsider on August 9, 2013. This appeal followed.
"An appellate court reviews the granting of summary judgment under the same standard applied by the [circuit] court under Rule 56, SCRCP." Wachovia Bank, N.A. v. Coffey, 404 S.C. 421, 425, 746 S.E.2d 35, 37 (2013) (quoting Quail Hill, LLC v. Cty. of Richland, 387 S.C. 223, 235, 692 S.E.2d 499, 505 (2010) ). The circuit court may grant a motion for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), SCRCP. "In determining whether any triable issue of fact exists, the evidence and all inferences which can reasonably be drawn therefrom must be viewed in the light most favorable to the nonmoving party." Wachovia Bank, 404 S.C. at 425, 746 S.E.2d at 38 (quoting Quail Hill, 387 S.C. at 235, 692 S.E.2d at 505 ). "Summary judgment should not be granted even when there is no dispute as to evidentiary facts if there is dispute as to the conclusion to be drawn from those facts."
Quail Hill, 387 S.C. at 235, 692 S.E.2d at 505 (quoting Brockbank v. Best Capital Corp., 341 S.C. 372, 378, 534 S.E.2d 688, 692 (2000) ).
Security Title argues that the "mere affixation of a corporate seal" does not make the title policy a "sealed instrument;" thus, the three-year statute of limitations applies to bar the Lyons' claims. We disagree.
"Statutes of limitations embody important public policy considerations in that they stimulate activity, punish negligence, and promote repose by giving security and stability to human affairs." Moates v. Bobb, 322 S.C. 172, 176, 470 S.E.2d 402, 404 (Ct.App.1996). "One purpose of a statute of limitations is ‘to relieve the courts of the burden of trying stale claims when a plaintiff has slept on his rights.’ " Id. (quoting McKinney v. CSX Transp., Inc., 298 S.C. 47, 49–50, 378 S.E.2d 69, 70 (Ct.App.1989) ). "Another purpose of the statute of limitations is to protect potential defendants from protracted fear of litigation." Id. "The cornerstone policy consideration underlying statutes of limitations is the laudable goal of law to promote and achieve finality in litigation." Carolina Marine Handling, Inc. v. Lasch, 363 S.C. 169, 175, 609 S.E.2d 548, 552 (Ct.App.2005). "Statutes of limitations are, indeed, fundamental to our judicial system." Id.
South Carolina Code section 15–3–530(1) provides for a three-year statute of limitations for "an action upon a contract, obligation, or liability, express or implied, excepting those provided for in Section 15–3–520." S.C.Code Ann. § 15–5–530(1) (2005). Under the discovery rule, Dean v. Ruscon Corp., 321 S.C. 360, 363, 468 S.E.2d 645, 647 (1996). "The discovery rule applies to breach of contract actions." Prince v. Liberty Life Ins. Co., 390 S.C. 166, 169, 700 S.E.2d 280, 282 (Ct.App.2010). "Pursuant to the discovery rule, a breach of contract action accrues not on the date of the breach, but rather on the date the aggrieved party either discovered the breach, or could or should have discovered the breach through the exercise of reasonable diligence." Maher v. Tietex Corp., 331 S.C. 371, 377, 500 S.E.2d 204, 207 (Ct.App.1998).
The Lyons asserted below that when their building permit was refused in May 2011, "they learn[ed] for the first time that there is an easement on the property[,] which essentially makes their property useless." However, the circuit court ruled there was evidence that the Lyons knew or should have known of the Spoil Easement as early as October 26, 2006, when they received a letter from the Army Corps of Engineers informing them of a disposal easement held by the United States on or adjacent to the area where they planned to construct a dock. The Lyons had previously received a substantively identical letter dated March 19, 2006.
South Carolina Code section 15–3–520(b) provides for a twenty-year statute of limitations for "an action upon a sealed instrument, other than a sealed note and personal bond for the payment of money...
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