Ralph v. McLaughlin
| Decision Date | 17 March 2021 |
| Docket Number | Opinion No. 28015,Appellate Case No. 2019-002031 |
| Citation | 432 S.C. 640,856 S.E.2d 154 |
| Court | South Carolina Supreme Court |
| Parties | Richard RALPH and Eugenia Ralph, Respondents, v. Paul Dennis MCLAUGHLIN and Susan Rode McLaughlin, Petitioners. |
G. Hamlin O'Kelley III, of Buist Byars & Taylor, LLC, of Mt. Pleasant, for Petitioners.
Ainsley F. Tillman and Ian S. Ford, both of Ford Wallace Thomson LLC, of Charleston; and G. Dana Sinkler, of Gibbs & Holmes, of Wadmalaw Island, for Respondents.
This action involves a dispute stemming from the removal of a drainage pipe running across neighboring properties. The pipe was part of an easement that was originally owned by the Seabrook Island Property Owners Association (SIPOA) and was intended to carry away stormwater from a road in the community, with the pipe running through the backyard portions of seven contiguous lots. Over the years, the drainage pipe degraded and became porous such that, aside from carrying away stormwater from the road, it also began draining standing water from the backyards of those seven lots. Nearly twenty years later, SIPOA installed a new drainage system for the road, rendering the old one obsolete. At a property owner's request, SIPOA formally abandoned the easement, although the porous pipe remained in place. Petitioners Paul and Susan McLaughlin later purchased one of the seven lots containing the old drainage pipe (Lot 22). After six years of meetings and consultation with SIPOA and their neighbors, and after receiving home design and location approval from SIPOA, Petitioners removed the pipe and built their new house over the area in which the pipe was previously located. Respondents Richard and Eugenia Ralph own the parcel next door to Petitioners (Lot 23). Following removal of the pipe, Respondents claimed their backyard flooding became worse than it already was and sued Petitioners. A jury awarded Respondents $1,000 in "nominal" damages, but, despite winning below, Respondents appealed. The court of appeals reversed and remanded for a new trial on damages alone.
Ralph v. McLaughlin , 428 S.C. 320, 834 S.E.2d 213 (Ct. App. 2019). We reverse the court of appeals and reinstate the jury's $1,000 verdict, thereby ending this case.
In the mid-1980s, when Lots 22 and 23 were initially created, the developer installed a corrugated-metal pipe to facilitate drainage from a road in the community. The developer installed the pipe through the backyard-portions of Lots 22 to 28, after which the pipe emptied into a water hazard on a neighboring golf course. When the developer recorded the plats for Lots 22 to 28, it noted the pipe as a twenty-foot wide drainage easement running under the lots. The recorded plat indicated the area between the drainage pipe and the golf course was a "no-build area."
As the years passed, the joints in the drainage pipe rotted and, although they were not originally designed to do so, began to allow standing water from the backyards of Lots 22 to 28 to seep into the pipe and be carried away with the stormwater from the road. In terms of the drainage easement, Lot 22 (Petitioners’ lot) is upstream of Lot 23 (Respondents’ lot).
In 2002, a parallel drainage system of high-density plastic piping was installed on the neighboring golf course, which rendered obsolete the existing corrugated-metal pipe running through Lots 22 to 28. Therefore, the SIPOA Board of Directors passed a resolution "to give the easement back to the property owner[s of Lots 22 to 28] with the understanding that the property owner[s] pay all cost[s] necessary to remove the easement." The then-owner of Lot 22—Petitioners’ predecessor in title—promptly recorded a plat (the Forsberg plat) showing the easement as abandoned, in line with the action taken by the SIPOA Board of Directors. The Forsberg plat states, "By the approval and recording of this plat[,] the existing ‘No Build Area’ is hereby removed as a limitation to location of any structure on Lot 22." Only one or two of the other six affected property owners of Lots 23 to 28 formally removed the easement from their property by recording SIPOA's abandonment of the easement.
Petitioners subsequently purchased Lot 22 with the understanding that SIPOA had abandoned the easement and that they (Petitioners) merely had to "take care of the removal of the pipe."1 For the next three years, believing the drainage easement was abandoned, Petitioners made plans to build their new home over the area in which the drainage pipe sat (i.e., the former no-build area). Eventually, Petitioners received approval from SIPOA to build their home in that location, subject to certain conditions, the most relevant of which was that Petitioners were "to assume all responsibility for the abandoned drainage easement that may contain a pipe."2
Respondents discovered Petitioners planned to remove the drainage pipe and voiced concerns about the potential adverse impact it could have on their lot's already-poor ability to drain itself. In response, SIPOA commissioned an engineering study of the pipe and the immediately surrounding area. The study ultimately recommended against destroying the drainage pipe because the pipe still functioned somewhat and benefitted the owners of Lots 22 to 28 by draining standing water from their backyards to some degree.
Subsequently, SIPOA invited the owners of Lots 22 to 28 to a meeting "to discuss the possibility of re-establishing the easement and providing for the long-term care of the pipe," acknowledging that "doing so w[ould] require the cooperation of all property owners." (Emphasis added). Ultimately, Petitioners, Respondents, and the other lot owners tentatively "agreed to grant [SIPOA] a new easement to connect out th[e corrugated-metal] pipe" to the drainage system in the neighboring golf course. (Emphasis added). However, connecting the abandoned pipe to the golf course's drainage system would have required the golf course to grant SIPOA an easement across the golf course's property.
Following that meeting, SIPOA informed Petitioners they bore the burden of negotiating for the new easement with the golf course. Believing any negotiations should be SIPOA's responsibility, Petitioners refused to take responsibility for negotiating a new easement with the golf course and declined to grant SIPOA a new easement. Moreover, the golf course was not willing to grant an easement or otherwise work with SIPOA or the parties to resolve the dispute over the abandoned easement. Thus, six years after Petitioners purchased Lot 22 with the abandoned easement, they decided to move forward with the building of their home.
Petitioners notified the other property owners of Lots 23 to 28 of their decision, explaining that they had attempted to be patient during the multi-year process, but they had already delayed construction of their home for six years waiting for the dispute to play out, and they did not want to put off building their home any longer. Petitioners then authorized their contractor to remove the drainage pipe and constructed their house over the former no-build area formerly containing the pipe.
After the pipe was removed, Respondents claimed there was an increase in the amount of water on their property, which they attributed to Petitioners. Believing their property's value had been greatly diminished, Respondents filed suit against Petitioners, asserting claims for trespass and intentional infliction of emotional distress and seeking hundreds of thousands dollars in actual and punitive damages. In turn, Petitioners filed a third-party complaint against SIPOA for indemnification in the event Respondents were successful, asserting Petitioner's actions were taken in reasonable reliance upon SIPOA's abandonment of the easement and representations that Petitioners could remove the pipe.
SIPOA then moved for, and was granted, summary judgment. In the summary judgment order, the presiding circuit court judge (who was not the trial judge) acknowledged Petitioners had produced evidence that would tend to show they reasonably relied on SIPOA's representations before removing the drainage pipe, which would seem to defeat SIPOA's summary judgment motion. Rather than considering the existence of evidence in support of Petitioners’ claims, the circuit court judge discounted Petitioners’ evidence, characterizing the evidence as hearsay and rejecting it. Petitioners did not appeal the summary judgment order at that time. Given the standard for granting summary judgment, the circuit court judge's decision is troubling.
The case proceeded to trial. At the close of Respondents’ (plaintiffs) case-in-chief, Petitioners successfully moved for a directed verdict on the punitive damages issue. The trial court found Respondents failed to prove by clear and convincing evidence that Petitioners acted with a reckless disregard of Respondents’ rights. Specifically, the trial court held Petitioners acted in reliance of SIPOA's statements that the easement was abandoned and they were permitted to build their house in the former no-build area.3 As a result, the trial court found that Petitioners’ actions did not "rise[ ] to the level of punitive damages."
Later, at the close of Petitioners’ (defendants) case-in-chief, Respondents made a motion for a directed verdict on their trespass claim. In relevant part, Respondents argued SIPOA's purported abandonment of the easement did not affect Respondents’ ownership interest in the easement. Therefore, according to Respondents, Petitioners’ actions in removing the drainage pipe and building a house in the former no-build area constituted trespass as a matter of law. The trial court denied Respondents’ motion for a directed verdict, finding the issue presented a jury question.
Ultimately, the jury found in favor of Respondents but only awarded them $1,000 in "nominal" damages.4 Respondents made motions for a new trial...
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