The Linda Mc Co. Inc v. Shore

• Decision Date: 07 September 2010
• Docket Number: Opinion No. 26878
• Parties: The Linda Mc Company, Inc., Respondent, v. James G. Shore and Jan Shore, Petitioners.
• Court: South Carolina Supreme Court

The Linda Mc Company, Inc., Respondent,

v. James G. Shore and Jan Shore, Petitioners.

Opinion No. 26878

State Of South Carolina

In The Supreme Court

Heard February 16, 2010

Filed September 7, 2010

John Martin Foster, of Rock Hill, for Petitioners.

James Ross Snell, of Lexington, for Respondent.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

Appeal from Lancaster County The Hon. William T. Moody, Circuit Court Judge; Brooks P. Goldsmith, Circuit Court Judge

AFFIRMED AS MODIFIED

CHIEF JUSTICE TOAL:

In this case, the Court granted James G. Shore and Jan Shore's (Petitioners) request for a writ of certiorari to review the court of appeals’ decision in Linda Mc Company, Inc. v. Shore, 375 S.C. 432, 653 S.E.2d 279 (Ct. App. 2007) affirming the trial court's issuance of an order to execute and levy a judgment against Petitioners.

Facts/Procedural History

On December 8, 1994, Petitioners agreed to give The Linda Mc Company, Inc. (Respondent) a judgment by confession as settlement of litigation over unpaid sales commissions. That judgment was entered June 2, 1995, ¹ and provided in pertinent part:

1. [Petitioners] confess judgment to [Respondent] in the amount of $110,000.00 and hereby authorize the Clerk of Court for Lancaster County, South Carolina, to enter judgment in favor of [Respondent] against [Petitioners], jointly and severally, for such amount, plus such costs and reasonable attorneys' fees incurred by [Respondent] in enforcing the unconditional guaranty, a copy of which is attached hereto as Exhibit 1 (the “Guaranty”). [Petitioners] further waive the service of any summons and complaint praying for such judgment.

2. [Petitioners] agree that [Respondent] may immediately, by affidavit through its attorneys, set forth the correct amount of this Judgment by adjusting the amount stated above for any credits previously applied by [Respondent], and that [Respondent] may apply to a court of competent jurisdiction for a judgment against [Petitioners], jointly and severally, in the amount of the total sum due and owing hereunder, plus costs and reasonable attorneys' fees incurred by [Respondent] in enforcing the Guaranty, without further notice to [Petitioners] and without further authority from [Petitioners]; provided, however, that in no event may said sum exceed $110,000.00, plus costs and reasonable attorneys' fees incurred by [Respondent] in enforcing the Guaranty. [Petitioners] authorize the entry of judgment for the amount due and owing as set out in the affidavit, which judgment will continue to bear interest at the highest legal rate permitted by law. The Judgment by Confession is not contingent upon any other considerations or proceedings and the Court is authorized to enter judgment for the amount set forth in the affidavit.

Sometime after the judgment was entered, Petitioners paid Respondent $55,000. On February 20, 2004, Respondent wrote a letter to Petitioners acknowledging an agreement to waive all post-judgment interest if Respondent received the remaining $55,000 before May 7, 2004. Petitioners paid Respondent $26,750 by check dated May 13, 2004.²

On July 29, 2004, Respondent filed a petition for supplemental proceedings alleging that Petitioner possessed assets subject to execution on the judgment. Petitioners issued a check to Respondent in the amount of $28,500 on August 3, 2004. On August 9, 2004, the trial court granted Respondent's petition for supplemental proceedings and referred the matter to a special referee.

On October 1, 2004, the special referee conducted a hearing to determine whether Petitioners had any assets that could satisfy the balance of the judgment. Petitioners filed a motion to dismiss under Rule 12(b)(1), SCRCP, alleging the judgment was void. Petitioner's motion was denied and the special referee concluded the judgment was valid and enforceable.

On May 24, 2005, the special referee conducted another hearing at which Petitioners argued the February 20, 2004 agreement was modified by a phone message left by Jan Shore (Jan) to Respondent's attorney such that the parties reached an accord and satisfaction. Jan testified that on May 13, 2004 she called and left a message on Respondent's attorney's answering machine stating she intended to split the remainder of the balance into two payments and "that if there was any problem with that to please call me."³ In that message she also stated she would pay the balance by the end of next quarter, which would have been July or August. Respondent's attorney testified that he recalled receiving phone calls from Petitioners but did not know what they were about and never called them back.⁴

On June 3, 2005, the special referee issued his report to the circuit court finding Petitioners owed interest outstanding from the entry of the judgment to date, as well as costs and attorneys' fees, and there had been no accord and satisfaction. On that same day, the circuit court issued an order to execute and levy upon assets owned by Petitioners. Petitioners did not raise the matter of the judgment's expiration in the trial court.

Petitioners appealed to the court of appeals, which held: (1) the absence of an affidavit did not render the judgment void; (2) because Petitioners did not argue that S.C. Code Ann. § 15-39-30 (2005) deprived the judgment of active energy to the trial court, that issue was not preserved for appellate review; (3) there was no accord and satisfaction; and (4) because estoppel was not presented to and ruled upon by the trial court, it was not preserved for appellate review. Linda Mc Company, Inc., 375 S.C. at 437-42, 653 S.E.2d at 281-84.⁵ This appeal followed.

Issues

I. Was the filing of the judgment void because Respondent failed to follow the terms of the parties' agreement to fix the amount of the judgment?

II. Does section 15-39-30 deprive the judgment of active energy?

III. Was there an accord and satisfaction?

IV. Should Respondent be estopped from arguing that there was no accord agreement because it did not respond to the phone message?

V. Did the expiration of the judgment render it and any supplemental proceedings to it moot?

VI. Did the expiration of the judgment deprive the circuit court of jurisdiction to proceed with supplemental proceedings or execution?

VII. Did the court of appeals decision establish an unworkable rule of procedure?

Standard of Review

"The question of subject matter jurisdiction is a question of law." Porter v. Labor Depot, 372 S.C. 560, 567, 643 S.E.2d 96, 100 (Ct. App. 2007) (citations omitted). "The issue of interpretation of a statute is a question of law for the court." Jeter v. S.C. Dep't of Transp., 369 S.C. 433, 438, 633 S.E.2d 143, 146 (2006) (citation omitted). An appellate court may decide questions of law with no particular deference to the trial court. In re Campbell, 379 S.C. 593, 599, 666 S.E.2d 908, 911 (2008) (citation omitted).

Law/Analysis

I. Terms of the Parties' Agreement

Petitioners argue Respondent failed to follow the terms of the parties' agreement to fix the amount of the judgment. Thus, its filing was void and the court's actions flowing from that filing are without jurisdiction. We disagree.

S.C. Code Ann. § 15-35-360 (2005) states:

Before a judgment by confession shall be entered a statement in writing must be made and signed by the defendant and verified by his oath to the following effect:

(1) It must state the amount for which judgment may be entered and authorize the entry of judgment therefor;

(2) If it be for the money due or to become due, it must state concisely the facts out of which it arose and must show that the sum confessed therefor is justly due or to become due; and

(3) If it be for the purpose of securing the plaintiff against a contingent liability, it must state concisely the facts constituting the liability and must show that the sum confessed therefor does not exceed the liability.

Rule 60(b)(4), SCRCP provides the court may relieve a party or his legal representative from a final judgment, order, or proceeding if the judgment is void. "The definition of 'void' under the rule only encompasses judgments from courts which failed to provide proper due process, or judgments from courts which lacked subject matter jurisdiction or personal jurisdiction." McDaniel v. U.S. Fid. & Guar. Co., 324 S.C. 639, 644, 478 S.E.2d 868, 871 (Ct. App. 1996) (citations omitted).

Petitioners contend the lack of an affidavit from Respondent setting forth the exact amount due under the judgment renders the judgment void.⁶ However, the language pertaining to the affidavit in the judgment is permissive and not mandatory. It states an affidavit setting forth the correct amount of the judgment "may" be filed by Respondent. The judgment complies with the statutory requirements of section 15-35-360 because it was made in writing, signed by Petitioners, and verified by their oath. Moreover, the lack of an affidavit does not render the judgment void under Rule 60, SCRCP, because the absence of an affidavit has no bearing on the subject matter jurisdiction of the court. Hence, because the judgment satisfies section 15-35-360 and the entrance of an affidavit was permissive and not mandatory, the court of appeals correctly held the judgment was not invalid for lack of an affidavit.

II. Section 15-39-30

Petitioners argue section 15-39-30 deprives the judgment of active energy and execution may not issue thereon because ten years have passed since the filing of the judgment. We disagree.

The court of appeals held this argument was not presented to the trial court and was therefore not preserved for appellate review. Linda Mc Company, Inc., 375 S.C. at 438, 653 S.E.2d at 282. In reaching this conclusion the court of appeals found "our supreme court construes the ten-year time limit on judgments in section 15-39-30 as a statute of limitations." Id. at 440, 653 S.E.2d at 283. Moreover, the court of appeals noted Petitioners had the opportunity to raise the defense in a motion to amend...