Sundown Operating Co. v. Intedge Indus.
| Decision Date | 23 February 2007 |
| Docket Number | 2007-UP-091 |
| Court | South Carolina Court of Appeals |
| Parties | Sundown Operating Company, Inc., a South Carolina corporation; Sunrise Coin Company, Inc., a South Carolina corporation; and High Noon Properties, Inc., a South Carolina corporation; Respondents/Appellants, v. Intedge Industries, Inc., a New Jersey corporation; Quickie Food Stores of North Myrtle Beach, Inc., d/b/a Hardwick's Bar & Restaurant Supplies, a South Carolina corporation; BFPE International, Inc., f/k/a Atlantic Fire Systems, Inc., a Maryland corporation; Wormald Fire Systems, Inc., f/k/a Ansul Fire Systems, Inc., a Delaware corporation; and Ansul Incorporated, a Delaware corporation, Defendants, of whom BFPE International, Inc., f/k/a Atlantic Fire Systems, Inc., a Maryland corporation is Appellant/Respondent. |
THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
Heard December 8, 2006
Appeal from Horry County Steven H. John, Circuit Court Judge, J Stanton Cross, Jr., Master-in-Equity
Charles E. Carpenter, and Carmen V. Ganjehsani, of Columbia Michael S. Hopewell, of Florence; for Appellant-Respondent.
Daniel Francis Blanchard, III, and Susan Corner Rosen, of Charleston; Peter Fredrick Asmer, Jr., of Charlotte; for Respondent-Appellants.
On cross-appeals from a default judgment, Sundown Operating Company, Sunrise Coin Company, and High Noon Properties, Inc. (collectively Sundown) contend the master-in-equity erred in (1) failing to award prejudgment interest, (2) invalidating the August 28, 2001 service of the summons and complaint, and (3) finding BFPE International, Inc. f/k/a Atlantic Fire Systems, Inc.'s motion complied with Rules 6(d) and 7(b)(1) of the South Carolina Rules of Civil Procedure. BFPE contends the master erred in failing to find that the October 2, 2001 entry of default should be voided as a matter of law and the master erred in failing to set aside the default judgment. We affirm.
On September 16, 1998, a fire destroyed a restaurant and pub owned and operated by Sundown. It is alleged that the fire was caused when a heating element in an electric fryer failed in an area that was submerged in frying oil causing the frying oil to ignite and burn.” According to Sundown the electric fryer was missing a high limit safety thermostat, which was supposed to automatically shut off the power to the heating unit once the frying oil temperature exceeded the safety thermostat's high temperature set point and would have allowed the frying oil to cool instead of igniting. Sundown also alleges that it had a service contract with BFPE to install, maintain, inspect and service Sundown's fire equipment, including range hood fire extinguishing systems and fire suppression systems.
On August 24, 2001, Sundown filed a Summons and Complaint against five defendants, including BFPE. In its complaint Sundown asserted causes of action for negligence and breach of contract against BFPE, alleging BFPE failed to properly inspect and maintain the fire suppression system. Sundown further alleged that the fire suppression system failed to operate properly, causing the fire to spread. Sundown sought actual and punitive damages and interest as provided by law” against all defendants, including BFPE.
BFPE is incorporated in Maryland and has nine business locations throughout Maryland, Virginia, North Carolina, and South Carolina. Because BFPE does not have a registered agent listed with the South Carolina Secretary of State, Sundown attempted to serve Donald R. Leonard, who was BFPE's registered agent in Maryland and North Carolina. On August 27, 2001, Sundown sent two copies of its Summons and Complaint to Leonard, at two separate addresses, Myrtle Beach, SC and Rocky Mount, NC. On August 28, 2001, service was accepted at the Myrtle Beach address. However, service was not accepted by Leonard, but rather by Randy Adams who signed Leonard's name. Apparently, Adams asked the postal carrier if he could sign for Leonard who advised him that he could.
The second set of the Summons and Complaint was received and signed for by Leonard on September 4, 2001. On or about September 5, 2001, Leonard gave the Summons and Complaint to David McGlynn, BFPE's general manager in Clayton, North Carolina. Glynn forwarded the papers to BFPE's Vice President, George Hill, in Hanover, Maryland. According to Hill, on September 14, 2001, he then forwarded a letter with copies of the Summons and Complaint to John Doetzer of Consolidated Insurance Carrier, BFPE's insurance agent. There is a dispute, however, over when Doetzer received the documents. Doetzer stated that the Summons and Complaint were not enclosed with the September 14, 2001 letter and were not forwarded to him until October 1, 2001.
On October 2, 2001, Doetzer telephoned Sundown's counsel to inquire about an extension of time to file an Answer. Sundown's counsel informed Doetzer that an entry of default had already been forwarded to the clerk of court and that an extension would most likely not be granted. Default was entered on the same day based upon Sundown's Affidavit of Service by Certified Mail filed on September 17, 2001. On October 15, 2001, suit papers were sent by BFPE's insurance carrier, CNA Insurance Company, to the assigned defense counsel for BFPE.
On October 18, 2001, BFPE filed a Notice of Motion and Motion to Set Aside Default and to Permit Enlargement of Time. On October 29, 2001, Sundown filed a Motion for Judgment by Default against BFPE based on the August 28, 2001 service date and entry of default on October 2, 2001. Sundown then filed another Affidavit of Counsel in Support of Entry of Default based on the September 4, 2001 service date. A second entry of default based on the September 4, 2001 service of process was entered on December 10, 2001.
A hearing was set for March 18, 2002 to hear BFPE's Motion to Set Aside Entry of Default. On March 12 and 14, 2002, BFPE filed seven affidavits in support of its motion. At the hearing, the circuit court allowed BFPE to file an Answer, based partly on the holding in Pilgrim v. Miller, 2002 WL 44112 (S.C. Ct. App. Jan. 14, 2002). However, upon learning that this court had granted a Petition for Rehearing in the Pilgrim case, the circuit court decided to delay issuing its opinion. On June 17, 2002, this court reversed the earlier opinion, affirming the trial court's denial of the motion to set aside the default in that case. See Pilgrim v. Miller, 305 S.C. 637, 567 S.E.2d 52 (Ct. App. 2002). [1] On July 18, 2002, the circuit court held a second hearing on BFPE's motion to set aside the default and denied BFPE's motion.
On September 28, 2004, an Order of Reference was issued referring the case to the master for a hearing to assess damages against BFPE and for the issuance of a final order. After the damages hearing, the master entered separate judgments in favor of Sundown as follows: (1) an award of $273, 336.00 in actual damages to Sunrise; (2) an award of $394, 848.38 in actual damages to Sundown Operating Company; and (3) an award of $524, 800.70 in actual damages to High Noon. The master denied Sundown's request for prejudgment interest. This appeal followed.
Sundown contends the master erred in failing to award prejudgment interest. We disagree.
An award of prejudgment interest is within the discretion of the fact-finder and will not be overturned absent an abuse of discretion. See Knight v. Sullivan Power Co., 140 S.C. 296, 304, 138 S.E. 818, 820-21 (1927) (). An abuse of discretion occurs when an order is controlled by an error of law or when the order is without evidentiary support. Thompson v Hammond, 299 S.C. 116, 119, 382 S.E.2d 900, 902-903 (1989).
Initially we address BFPE's argument that Sundown failed to specifically plead for the recovery of prejudgment interest in its complaint as required by South Carolina law. It has been well established under South Carolina law that parties must plead for prejudgment interest in order for it to be recovered. See McMillan v. S.C. Dep't of Agric., 364 S.C. 60, 74, 611 S.E.2d 323, 330 (Ct. App. 2005) (Prejudgment interest must be specifically pled in order to be recovered.”) If no request for prejudgment interest is made in the pleadings, it cannot be recovered on appeal.” Tilley v. Pacesetter Corp., 355 S.C. 361, 375, 585 S.E.2d 292, 299 (2003) (citation omitted).
In its complaint, Sundown makes only a general request for interest as provided by law.” This request is too general and vague to meet the strict requirement that a demand for prejudgment interest must be specifically pled. Sundown offers numerous cases for the proposition that a pleading such as its is sufficient. However, all of the cases cited are outside this jurisdiction, and South Carolina case law is controlling. Accordingly, Sundown did not sufficiently plead prejudgment interest and thus should not be awarded such.
However, even if this court were to find Sundown sufficiently pled prejudgment interest, the master was correct in refusing the award. Sundown argues it is entitled to an award of prejudgment interest under two theories. First, Sundown argues it should be awarded prejudgment interest as an element of damages.
Sundown cites to the cases of Knight v. Sullivan Power Co. 140 S.C. 296, 138 S.E. 818 (1927) and Wilson & Co. v. Atlanta & Charlotte Airline Ry., 16 S.C. 587 (1882) for the proposition that prejudgment interest can be recovered in tort claims. However, in both of these cases it was recognized that a plaintiff could not recover interest as a matter of...
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