Rogers v. Lee
| Decision Date | 02 September 2015 |
| Docket Number | Appellate Case No. 2013–002699.,No. 5348.,5348. |
| Court | South Carolina Court of Appeals |
| Parties | Gretchen A. ROGERS, as Guardian ad Litem for Mark A. Malloy, Appellant, v. Kenneth E. LEE and Law Offices of Lee & Smith, P.A., Respondents. |
Thomas A. Pendarvis and Catherine Brown Kerney, both of Pendarvis Law Offices, PC, of Beaufort, and Brent Paul Stewart, of Stewart Law Offices, LLC, of Rock Hill, for appellant.
David W. Overstreet and Michael Baxter McCall, both of Carlock Copeland & Stair, LLP, of Charleston, for respondents.
Gretchen A. Rogers, as guardian ad litem (GAL) for Mark A. Malloy, brought this legal malpractice action against Kenneth E. Lee (Attorney Lee) and Law Offices of Lee & Smith, P.A. (the Law Office) (Attorney Lee and the Law Office hereinafter collectively referred to as LEE), based upon LEE's representation of Malloy in a North Carolina workers' compensation claim. Rogers appeals from an order of the trial court granting summary judgment in favor of LEE on the basis that North Carolina's substantive law applies such that the state's statute of repose bars the legal malpractice claim. We affirm.
Attorney Lee, who is licensed to practice law in North Carolina, represented Malloy in a North Carolina workers' compensation claim after Malloy sustained injuries in 2002 when he fell from a ladder while working in North Carolina for a North Carolina employer. On April 16, 2003, Malloy entered into a contract of representation, retaining the Law Office to represent him in the matter and pursue the North Carolina workers' compensation claim. Among other things, this agreement provided representation of Malloy would end “when the case is either settled or decided at a hearing.” Additionally, it stated as follows: “This agreement shall be governed by the law of the State of North Carolina and the Rules and Regulations of the North Carolina Industrial Commission.” On November 25, 2003, Malloy entered into a settlement agreement with the employer and carrier to accept payment of $100,000 in full satisfaction of any current and future claims he may have as a result of the accident. Both Attorney Lee and Malloy were present at mediation in North Carolina when the settlement was reached and, along with Malloy's wife, executed the agreement at that time. By letter dated February 25, 2004, the Law Office disbursed Malloy's settlement funds from its South Carolina office to Malloy's South Carolina home. The Law Office's last correspondence with Malloy occurred on January 10, 2005, when Malloy was provided with a copy of a form in regard to his workers' compensation claim.
Rogers, as GAL for Malloy, filed this action in Spartanburg County's Court of Common Pleas on December 6, 2012, asserting claims for professional negligence, breach of fiduciary duty, and breach of contract. Thereafter, LEE filed a motion for summary judgment on the ground Malloy's claims were barred by North Carolina's four-year statute of repose, asserting the claims were governed by North Carolina substantive law and more than four years had elapsed since the last alleged act or omission giving rise to the causes of action.1 Rogers opposed the motion for summary judgment, arguing South Carolina follows the traditional choice of law principle whereby the substantive law applied in a tort action is governed by the lex loci delicti, which is the law of the state in which the injury occurred. She asserted Malloy's financial injury stemming from LEE's professional negligence and breach of fiduciary duty occurred in South Carolina, where he resided. She additionally maintained South Carolina, which has not adopted a statute of repose for professional negligence or breach of fiduciary claims against lawyers, has an interest in compensating victims for injuries resulting from such negligence and breach of duty, and in particular when the resulting injury occurs in South Carolina.
The trial court filed a Form 4 order on September 5, 2013, granting summary judgment to LEE. In this order, the trial court noted the contract between the parties contained a choice of law clause providing North Carolina substantive law would govern the contract, that Rogers alleged LEE negligently settled the North Carolina workers' compensation action, and North Carolina's statute of repose would bar the present action. The court held the case of Nash v. Tindall Corp., 375 S.C. 36, 650 S.E.2d 81 (Ct.App.2007) controlled the matter and, noting the underlying workers' compensation action was filed, mediated, settled and approved in North Carolina, concluded the lex loci delicti of the action arose in North Carolina.
The trial court thereafter filed a formal order, again finding this case indistinguishable from Nash, as Rogers alleged Malloy's injuries were directly and proximately caused by Malloy's acceptance of LEE's advice to settle his workers' compensation claim and that advice was given and relied upon at mediation in North Carolina, and Malloy agreed to the settlement and executed the settlement agreement in North Carolina. Additionally, the trial court found Malloy sought out and retained an attorney licensed to practice in North Carolina to pursue a workers' compensation claim in North Carolina, his underlying workers' compensation claim was for injuries sustained in North Carolina while working for a North Carolina employer, and the parties' relationship was governed by the substantive law of North Carolina pursuant to the terms of their contract of representation. In regard to any public policy exception as a basis for declining to apply North Carolina's statute of repose, the trial court found the fact that the law of two states may differ does not necessarily indicate the law of one state violates the public policy of another. It noted our courts have specifically held the “good morals or natural justice” of South Carolina are not violated when foreign law is applied to preclude a tort action for money damages, even if recovery could be had in application of South Carolina law, and our courts have also repeatedly adhered to the lex loci delicti rule to apply foreign law to defeat a claim which would have survived under South Carolina law. Accordingly, it found North Carolina's statute of repose did not violate the public policy of South Carolina.
Rogers filed a motion to alter or amend, asserting the location where Malloy's “injury was manifested” was the key to applying South Carolina's choice of law jurisprudence, and because all of Malloy's financial injuries occurred in South Carolina, the substantive law of South Carolina governed this legal malpractice tort action. In argument before the trial court, Rogers cited Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 494 S.E.2d 449 (Ct.App.1997) and Bannister v. Hertz Corp., 316 S.C. 513, 450 S.E.2d 629 (Ct.App.1994) in support of her position that South Carolina substantive law controlled the tort claims. As to the trial court's finding that the parties' relationship was governed by North Carolina law pursuant to the terms of their contract of representation, Rogers argued this was a misstatement, as the contract was between Malloy and the Law Office, not Attorney Lee individually. Rogers conceded that the contract of representation between Malloy and the Law Office contained a North Carolina choice of law provision which would operate to bar Malloy's breach of contract cause of action against the Law Office, but maintained such would not bar the other tort claims.
Following the hearing on Rogers' motion for reconsideration, the trial court issued an order finding Lister and Bannister to be distinguishable from the case at hand. The trial court further noted Rogers encouraged the court to read the principle that “the substantive law governing a tort action is determined by the state in which the injury occurred” to mean “the state in which the results of the injury manifest themselves. ” The trial court then stated as follows: The trial court therefore declined to alter or amend its prior orders.
Under South Carolina choice of law principles, the substantive law governing a tort action is determined by the state in which the injury occurred, commonly referred to as the lex loci delicti rule. Boone v. Boone, 345 S.C. 8, 13, 546 S.E.2d 191, 193 (2001) ; Bannister, 316 S.C. at 515, 450 S.E.2d at 630. A statute of repose “creates a substantive right in those protected to be free from liability after a legislatively-determined period of time,” and it “constitutes a substantive definition of rights rather than a procedural limitation provided by a statute of limitation.” Nash, 375 S.C. at 40, 650 S.E.2d at 83.
We disagree with Rogers' assertion that the lex loci delicti is determined simply by the location of manifestation of a plaintiff's financial damages in a legal malpractice action.
South Carolina law clearly provides lex loci delicti is determined by the state in which the injury occurred, not where the results of the injury were felt or where the damages manifested themselves. Boone, 345 S.C. at 13, 546 S.E.2d at 193 ; Bannister, 316 S.C. at 515, 450 S.E.2d at 630. The alleged injury to Malloy was the loss of his opportunity to further pursue his underlying workers' compensation claim or settle for a greater sum of money, and this injury occurred in North Carolina where LEE undertook representation of Malloy in his workers' compensation claim, where Malloy accepted Attorney Lee's advice to settle his claim for $100,000, and where Malloy entered into the binding settlement...
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