Richland County v. Carolina Chloride, Inc.
| Decision Date | 25 November 2008 |
| Docket Number | No. 4462.,4462. |
| Citation | 677 S.E.2d 892 |
| Parties | RICHLAND COUNTY, Respondent, v. CAROLINA CHLORIDE, INC., Appellant. |
| Court | South Carolina Court of Appeals |
Edward D. Sullivan, Christian Stegmaier and Amy L. Neuschafer, all of Columbia, for appellants.
Andrew F. Lindermann, William H. Davidson III and Michael B. Wren, all of Columbia, for respondent.
Carolina Chloride, Inc. appeals a directed verdict involving the zoning of real property in Richland County. We now withdraw our previous opinion from publication and substitute this revised opinion.1 We affirm as modified in part, and reverse and remand in part.
In November of 1996, Carolina Chloride purchased 7.67 acres of land in Richland County from IBM for $85,000. Prior to the purchase, Carolina Chloride's realtor contacted the Richland County Planning and Zoning Department ("County") to inquire about the zoning of the IBM property. Carolina Chloride required M-2 zoning for heavy industry because it planned to use the property for storing and distributing calcium chloride, a nonhazardous chemical used for ice or dust control on roads and for treating drinking water. In response to the inquiry, County allegedly informed the realtor of the property's M-2 zoning designation.2
The month after purchase of the property, Carolina Chloride's president, Robert Morgan ("Morgan"), went to County seeking a building permit. The zoning administrator, Terry Brown, told Morgan he believed the County zoned the property M-2, but there was a question about the tax map. The following day, the zoning administrator wrote Morgan a letter confirming County zoned the property M-2.
Over the ensuing six years, Carolina Chloride invested more than four hundred thousand dollars to improve the property, including building a mini-warehouse business. In order to build and maintain the businesses on the property, Carolina Chloride sought multiple licenses, certificates, and permits from County. Either the zoning administrator or other authorized County employees approved all such requests with each reflecting M-2 zoning.
In 2002, Morgan began negotiating the sale of the business with Allen, Johnette and Luke Watson ("the Watsons"). In pursuit of Carolina Chloride's purchase, the Watsons entered discussions with a bank to obtain financing, reviewed Carolina Chloride's financial records, and created a business plan for their intended expansion of the company. After continued discussions, Morgan agreed to sell Carolina Chloride and all its assets for 1.1 million dollars; however, Morgan and the Watsons never reduced the agreement to writing.
Thereafter, Carolina Chloride and the Watsons contacted John W. Hicks ("Hicks"), County's employee authorized to inform citizens whether their intended property use conformed to applicable zoning ordinances. Carolina Chloride sought County's approval for the Watsons' planned expansion of Carolina Chloride's property. On February 13, 2003, Hicks advised Carolina Chloride the property was zoned rural (RU). Hicks further advised that the current use of the property did not conform to the zoning ordinances; therefore, County would not permit any future expansion of the property. Hicks did state Carolina Chloride could continue its nonconforming use and could petition the Planning Commission to amend the zoning map to reflect M-2 zoning. As a result, the Watsons decided they did not want to purchase Carolina Chloride alleging RU zoning "totally killed the sale."
In August of 2003, Carolina Chloride petitioned to change the property's zoning from RU to M-2. On November 4, 2003, Richland County Council approved the request and amended the zoning map. Carolina Chloride subsequently filed suit against County alleging multiple causes of action associated with the unsuccessful sale of Carolina Chloride's property.
At trial, County denied all claims and asserted defenses under the South Carolina Tort Claims Act. During trial, the court refused to allow Carolina Chloride to read sections of Terry Brown's deposition to the jury because Terry Brown was no longer the zoning administrator. At the end of Carolina Chloride's case-in-chief, the trial court granted County's motion for directed verdict on all causes of action. Carolina Chloride filed a motion to reconsider, which the trial court denied. Carolina Chloride now appeals.3
I. Did the trial court err in excluding the testimony of the former zoning administrator?
II. Did the trial court err in finding there was no right to rely regarding the constructive fraud claim?
III. Did the trial court err as a matter of law in finding Richland County did not owe a duty to Carolina Chloride?
IV. Did the trial court err as a matter of law in finding the Tort Claims Act provided Richland County with immunity?
V. Did the trial court err in finding no evidence of gross negligence by Richland County?
VI. Did the trial court err in ruling as a matter of law there was no governmental taking by Richland County?
VII. Did the trial court err in ruling as a matter of law there was no deprivation of substantive due process by Richland County?
VIII. Did Carolina Chloride waive its governmental estoppel and promissory estoppel arguments?
When ruling on a motion for directed verdict, appellate courts apply the same standard as the trial court viewing evidence and all reasonable inferences in the light most favorable to the non-moving party. Gadson ex rel. Gadson v. ECO Servs. of South Carolina, Inc., 374 S.C. 171, 175-76, 648 S.E.2d 585, 588 (2007). A court should deny a motion for directed verdict "when the evidence yields more than one inference or its inference is in doubt." Sabb v. South Carolina State Univ., 350 S.C. 416, 427, 567 S.E.2d 231, 236 (2002). This court will reverse only when there is no evidence to support the ruling or when the ruling is controlled by an error of law. Law v. South Carolina Dep't of Corr., 368 S.C. 424, 434-35, 629 S.E.2d 642, 648 (2006).
The admission of evidence is within the sound discretion of the trial court. Gamble v. Int'l Paper Realty Corp. of South Carolina, 323 S.C. 367, 373, 474 S.E.2d 438, 442 (1996). The exclusion of evidence will not be reversed on appeal absent an abuse of discretion. Id.
The trial court prohibited Carolina Chloride from reading excerpts of the deposition of Terry Brown (the former zoning administrator) at trial based on Rule 32(a)(2), SCRCP. The rule provides, "[t]he deposition of a party or of anyone who at the time of taking the deposition was an officer, director, or managing agent . . . may be used by an adverse party for any purpose." Rule 32(a)(2), SCRCP.
Carolina Chloride argues Brown qualified as an officer, director, or managing agent under Rule 32(a)(2), SCRCP. While Brown was no longer the zoning administrator for County when deposed, Carolina Chloride asserts he met the requirements of Rule 32(a)(2), SCRCP, as a current member of the Zoning Board of Adjustment. Carolina Chloride, however, has not demonstrated the trial court abused its discretion by excluding Brown's deposition testimony. Furthermore, Brown's current status as a member of the Zoning Board of Adjustment, in and of itself, does not require admission of the deposition under Rule 32(a)(2), SCRCP. Carolina Chloride did not lay any foundation as to why Brown's role on the Board qualifies under Rule 32(a)(2). If not admissible under Rule 32(a)(2), Carolina Chloride needed to demonstrate Brown was unavailable pursuant to Rule 32(a)(3), SCRCP, or alternatively, if Brown was available, Carolina Chloride should have called him as a witness at trial. Indeed, Carolina Chloride opined at trial that the application of Rule 32(a)(2), SCRCP, to the admissibility of Brown's deposition was "a weak argument." Consequently, the trial court did not abuse its discretion in excluding Brown's deposition at trial in the absence of the requisite foundation.4
Carolina Chloride argues the trial court erred in dismissing the constructive fraud claim because a right to rely exists when there is no evidence the government employee is acting outside the scope of his authority.
To prove constructive fraud, all elements of actual fraud except the element of intent must be established. Armstrong v. Collins, 366 S.C. 204, 219, 621 S.E.2d 368, 375 (Ct.App.2005). To sustain a claim for fraud, the following elements must be demonstrated "by clear, cogent, and convincing evidence: (1) a representation of fact; (2) its falsity; (3) its materiality; (4) either knowledge of its falsity or a reckless disregard of its truth or falsity; (5) intent that the representation be acted upon; (6) the hearer's ignorance of the falsity; (7) the hearer's reliance on its truth; (8) the hearer's right to rely thereon; and (9) the hearer's consequent and proximate injury." Schnellmann v. Roettger, 373 S.C. 379, 382, 645 S.E.2d 239, 241 (2007). "Actual fraud is distinguished from constructive fraud by the presence or absence of the intent to deceive." Armstrong, 366 S.C. at 219, 621 S.E.2d at 375. "However, in a constructive fraud case, where there is no confidential or fiduciary relationship, and an arm's length transaction between mature, educated people is involved, there is no right to rely." Id. (internal quotations omitted).
Here, Carolina Chloride has failed to offer evidence demonstrating a confidential or fiduciary relationship arose between Carolina Chloride and County employees. "A confidential or fiduciary relationship exists when one imposes a special confidence in another, so that the latter, in equity and good conscience, is bound to act in good faith and with due regard for the interests of the one imposing the confidence." Hendricks v. Clemson Univ., 353 S.C. 449, 458, 578 S.E.2d 711, 715 (2003) (...
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