Mortgage Recovery Fund-Riverbend, Ltd. v. Heritage Clipper Riverbend Trust

• Citation: 327 S.C. 491,489 S.E.2d 655
• Decision Date: 30 June 1997
• Docket Number: FUND--RIVERBEN,No. 2688,LTD,2688
• Court: Court of Appeals of South Carolina
• Parties: MORTGAGE RECOVERY, Respondent, v. HERITAGE CLIPPER RIVERBEND TRUST, Stephen M. Chapman, BVH Partners, Bank of New England, N.A., Town & Campus International, Inc., Sentry Management Corporation, a Massachusetts Corporation, and Sentry Management Corporation, a New Hampshire Corporation, of whom Sentry Management Corporation, a New Hampshire Corporation is the Appellant.

Page 655

489 S.E.2d 655

327 S.C. 491

MORTGAGE RECOVERY FUND--RIVERBEND, LTD., Respondent, v. HERITAGE CLIPPER RIVERBEND TRUST, Stephen M. Chapman, BVH

Partners, Bank of New England, N.A., Town & Campus

International, Inc., Sentry Management Corporation, a

Massachusetts Corporation, and Sentry Management

Corporation, a New Hampshire Corporation,

of whom Sentry Management Corporation, a New Hampshire

Corporation is the Appellant.

No. 2688.

Court of Appeals of South Carolina.

Submitted May 6, 1997.

Decided June 30, 1997.

Michael S. Church, of Turner, Padget, Graham & Laney, Columbia, for appellant.

Edward D. Barnhill, Jr., of Morris, Morris & Barnhill, Columbia, for respondent.

HEARN, Judge:

Mortgage Recovery Fund (MRF) originally brought this mortgage foreclosure action against the owners of certain real property located in Lexington County, South Carolina. MRF later amended its complaint and added a cause of action against Sentry Management Corporation (Sentry). Sentry appeals from the order of the master-in-equity denying its motion to transfer the case to the jury roster. We reverse.

Facts

MRF filed this mortgage foreclosure action in March 1994 in connection with the mortgage default of an apartment complex. MRF sought reformation of the commercial mortgage, the appointment of a receiver, and foreclosure of the mortgage. A receiver was appointed on April 22, 1994 and given possession of the apartment complex. By consent of the parties, the case was referred with finality to the Lexington County Master-in-Equity in July 1994.

In December 1994, MRF amended its complaint to add a cause of action against Sentry. In the amended complaint, MRF alleges that for a period of time Sentry was managing agent for the defendants Heritage Clipper Riverbend Trust, Stephen M. Chapman, and BVH Partners. During this time, MRF alleges Sentry received excessive management fees in the amount of $400,000 while the loan was in default. In the prayer for relief, the only relief requested in connection with Sentry is "a money judgment against the Defendants, Sentry Management Corporation, jointly and severally."

In December 1995, Sentry filed a motion to transfer the case to the jury docket. The master denied the motion, finding that MRF's main purpose in bringing the action was equitable.

Discussion

Sentry argues the master erred in denying its motion to transfer the case to the jury docket because the only cause of action brought against it was legal. We agree.

An action to foreclose a real estate mortgage comes within the equitable jurisdiction of the court. MI Co., Ltd. v. McLean, 325 S.C. 616, 482 S.E.2d 597, 601 (Ct.App.1997). However, under Rule 38(a), SCRCP, issues of fact in an action for money only must be tried by a jury unless a jury trial is waived. In determining whether the case is legal or equitable, some South Carolina cases have applied the "main purpose rule." If a plaintiff has prayed for money damages in addition to equitable relief, characterization of the action as equitable or legal depends on the plaintiff's "main purpose" in bringing the action. Baughman v. AT & T, 298 S.C. 127, 129, 378 S.E.2d 599, 600 (1989). However, numerous cases have held that where legal and equitable issues and rights are asserted in the same complaint, legal issues are for determination by a jury and equitable issues for the judge. Airfare, Inc. v. Greenville Airport Comm., 249 S.C. 265, 269, 153 S.E.2d 846, 848 (1967); Winter v. U.S. Fidelity & Guaranty Co., 240 S.C. 561, 573, 126 S.E.2d 724, 730 (1962).

In Floyd v. Floyd, 306 S.C. 376, 412 S.E.2d 397 (1991), the South Carolina Supreme Court set out to resolve this apparent conflict in the case law, stating:

We are concerned that, as courts have sought to ascertain the "main purpose" of lawsuits, the pendulum appears to have swung with steadied progress toward decisions tending to place within the sole purview of the equity judge issues properly triable only by jury....

As we interpret the "main purpose" rule, its primary function is to administratively categorize an action in which parties...