Roche v. Young Bros., Inc.

• Decision Date: 10 August 1998
• Docket Number: No. 24829.,24829.
• Citation: 504 S.E.2d 311,332 S.C. 75
• Parties: Catherine ROCHE, as Personal Representative for the Estate of George Roche, Petitioner, v. YOUNG BROTHERS, INC., OF FLORENCE, d/b/a Days Inn East, Respondent.
• Court: South Carolina Supreme Court

332 S.C. 75

504 S.E.2d 311

Catherine ROCHE, as Personal Representative for the Estate of George Roche, Petitioner, v. YOUNG BROTHERS, INC., OF FLORENCE, d/b/a Days Inn East, Respondent.

No. 24829.

Supreme Court of South Carolina.

Heard May 27, 1998.

Decided August 10, 1998.

William P. Hatfield and Gary I. Finklea, both of The Hyman Law Firm, Florence, for petitioner.

William Reynolds Williams, and C. Craig Young, both of Willcox, McLeod, Buyck & Williams, Florence, for respondent.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

TOAL, Justice:

This case involves a default judgment in a negligence action. George Roche originally brought this negligence action against Respondent Young Brothers, d/b/a Days Inn East ("Young Brothers"), as a result of a slip-and-fall accident in Young Brothers' motel parking lot. Petitioner Catherine Roche, as personal representative of her husband's estate, appeals the Court of Appeals' decision that Young Brothers' consent was required prior to the circuit court appointing a special referee to consider the damages matter. We reverse and reinstate the special referee's order.

FACTUAL/PROCEDURAL BACKGROUND

On March 19, 1990, Roche slipped and fell in the parking lot of Young Brothers' motel located in Florence, South Carolina. Roche filed suit against Young Brothers in circuit court on August 31, 1990. Young Brothers failed to answer Roche's complaint. A default was entered against Young Brothers on November 2, 1990. Without notice to Young Brothers, a damages hearing was held before the circuit court on February 6, 1992. The circuit court awarded Roche $15,000.00 in actual damages and $30,000.00 in punitive damages.

On February 14, 1992, Young Brothers filed a motion to set aside the default judgment under Rule 60(b), SCRCP. Young Brothers argued that the judgment should be set aside because service of process was not perfected, and, in the alternative, a new damages hearing should be granted because it did not receive notice of the hearing. The circuit court denied the motion. In July 1992, Young Brothers appealed the judgment to the Court of Appeals. The Court of Appeals reversed the circuit court's default judgment, finding service of process had not been perfected. Roche v. Young Bros., Inc. of Florence, 313 S.C. 356, 437 S.E.2d 560 (Ct.App.1993) ("Roche I"). We reversed the Court of Appeals and reinstated the entry of default. Roche v. Young Bros., Inc. of Florence, 318 S.C. 207, 456 S.E.2d 897 (1995) ("Roche II"). However, we vacated the default judgment and awarded a new damages hearing because Young Brothers had failed to receive notice. Thus, the case was remanded back to the circuit court for a new damages hearing.

In April 1995, Roche filed an ex parte motion with the circuit court requesting that the damages matter be referred to Eugene A. Fallon, Jr., as special referee. The circuit court granted the motion. Young Brothers did not receive notice of Roche's motion prior to the circuit court issuing its order of reference. Young Brothers later made a motion before the circuit court to have the reference withdrawn. The motion was denied.

The damages hearing was held before special referee Fallon on June 19, 1995. Young Brothers appeared and was represented by counsel. On July 28, 1995, the special referee, by written order, awarded Roche $25,000.00 in actual damages and $75,000.00 in punitive damages.

On appeal before the Court of Appeals, Young Brothers raised seven issues challenging the special referee's order. The Court of Appeals only addressed the issue concerning the circuit court's authority to refer the case to a special referee without the consent of the defaulting party. The Court of Appeals reversed, finding consent was necessary since Young Brothers made an appearance in the case. Roche v. Young Bros., Inc. of Florence, 326 S.C. 488, 485 S.E.2d 110 (Ct.App. 1997) ("Roche III").

We granted Roche's petition for a writ of certiorari to address the following issue:

Is the consent of a defaulting party required for the circuit court to refer a case to a special referee, where the defaulting defendant has made an appearance in the case?

LAW/ANALYSIS

A. CONSENT

Roche argues that the Court of Appeals erred in holding that where the defaulting party has made an appearance in the case, the consent of that party must be obtained before the circuit court may refer the case to a special referee. We agree.

The circuit court's authority to appoint a special referee is supplied by S.C.Code Ann. § 14-11-60 (Supp.1997), which states:

In case of a vacancy in the office of master-in-equity or in case of the disqualification or disability of the master-inequity from interest or any other reason for which cause can be shown the presiding circuit court judge, upon agreement of the parties, may appoint a special referee in any case who as to the case has all the powers of a master-in-equity. The special referee must be compensated by the parties involved in the action.

(emphasis added). The emphasized language was added by amendment in 1988. (1988 Act No. 678, Part II, § 6, eff. January 1, 1989).

The appointment and powers of special referees are further governed by Rule 53, SCRCP. Rule 53 provides in pertinent part:

(a) Appointment and Compensation. As used in these rules the word "master" includes a referee.... The court in which any action is pending may appoint a special master for that action; but where practicable the master appointed by statute for that county, or for that court, or for the particular type of action involved shall act. The court may in its discretion appoint as a special master a person agreed upon by the parties....

(b) Reference. In an action where the parties consent or in a default case, any and all issues, whether of law or fact, may be referred to a master by order of a judge or the clerk of court.

(emphasis added).

The problem in this case lies in reconciling the language in section 14-11-60 and Rule 53(a) with that in Rule 53(b). Section 14-11-60 and Rule 53(a) seem to require, without exception, the agreement of the parties prior to the appointment of a special referee. Rule 53(b), on the other hand, suggests that consent is not required in a default situation. This interpretation of Rule 53(b) was confirmed in First Palmetto State Bank and Trust Company v. Boyles, 302 S.C. 136, 138, 394 S.E.2d 313, 314 (1990) where we held that Rule 53(b) "authorizes the circuit court to refer an action to a master-in-equity (1) by consent of the parties, (2) if there is a default, (3) in actions with complicated issues to be tried before a jury, and (4) in all other actions, upon application of any party or upon the court's motion." 302 S.C. at 138, 394 S.E.2d at 314.

This Court's primary function in interpreting a statute is to ascertain the intent of the legislature. State v. Baker, 310 S.C. 510, 427 S.E.2d 670 (1993). A statute as a whole must receive a practical, reasonable, and fair interpretation consonant with the purpose, design, and policy of the lawmakers. Id. Generally, statutes are to be construed with reference to the whole system of law of which they form a part. See 82 C.J.S. Statutes § 362 (1953). In construing a statute, this Court is constrained to avoid an absurd result. South Carolina Tax Comm'n v. Gaston Copper Recycling Corp., 316 S.C. 163, 447 S.E.2d 843 (1994).

It is well settled that by suffering a default, the defaulting party is deemed to have admitted the truth of the plaintiff's allegations and to have conceded liability. Howard v. Holiday Inns Inc., 271 S.C. 238, 246 S.E.2d 880 (1978); Schenk v. National Health Care, Inc., 322 S.C. 316, 471 S.E.2d 736 (Ct.App.1996); State ex rel. Medlock v. Love Shop, Ltd., 286 S.C. 486, 334 S.E.2d 528 (Ct.App.1985). Though a defaulting party may be entitled to notice of the damages hearing, that party is limited to cross-examining witnesses and objecting to evidence. Howard, 271 S.C. 238,246 S.E.2d 880; Ammons v. Hood, 288 S.C. 278, 341 S.E.2d 816 (Ct.App.1986). Moreover, once a party defaults, the trial court "may conduct such hearings or order such references as it deems necessary and proper" to enter the default judgment. Rule 55(b)(1), SCRCP. Thus, although section 14-11-60 and Rule 53(a) do not specifically address default situations, it would be anomalous to interpret these provisions as requiring the consent of a defaulting party whenever the circuit court chose to refer the case to a special referee.

Not requiring the consent of a defaulting party is evidenced elsewhere in the Code and in the rules of civil procedure. For example, S.C.Code Ann. § 14-11-85 (Supp.1997) provides that an appeal from the judgment of a master-in-equity must be to the circuit court unless the parties not in default consent in writing or on the record to a direct appeal to the Supreme Court. Another example is found in Rule 38(d), SCRCP, which provides in pertinent part: "A demand for trial by jury made as herein provided may not be withdrawn without the consent of the parties, except where an opposing party is in default under Rule 55(a)." (emphasis added).

The Court of Appeals nevertheless suggests that the instant case does not fall within the "classic default" situation and, therefore, is not entitled to be excepted from the general consent requirement. The Court of Appeals explains that this is not a classic default situation because Young Brothers made an appearance in the case. As such, it would not have been unduly burdensome for Roche to have obtained Young Brothers' consent. We disagree.

Young Brothers clearly defaulted by failing to answer Roche's complaint within the prescribed time. Young Brothers' status as a defaulting party was not vitiated simply because it later chose to challenge the default judgment rendered against it. Contrary to the Court of Appeals' opinion, Young Brothers' default was in every way classic, as evidenced by our affirmation of the entry of default...