Tilley v. Pacesetter Corp.
| Decision Date | 26 October 1998 |
| Docket Number | No. 24848.,24848. |
| Citation | 333 S.C. 33,508 S.E.2d 16 |
| Parties | Reather B. TILLEY, Willis E. Wood, Owena R. Wood, Louise Williams, on behalf of themselves and all others similarly situated, Respondents, v. PACESETTER CORPORATION, including but not limited to its division known as Federal Diversified Services, Appellant. |
| Court | South Carolina Supreme Court |
Desa Ballard, of West Columbia; Miles Loadholt, of Ness, Motley, Loadholt, Richardson & Poole, of Barnwell; Daryl L. Williams, of Jeter & Williams, of Columbia, and Richard Sinkfield, of Rogers & Hardin, of Atlanta, Ga., for appellant.
Steven W. Hamm and Mary S. League, both of Richardson, Plowden, Carpenter & Robinson, PA, of Columbia; T. Alexander Beard, of Beard Law Offices, of Charleston; Bradford P. Simpson and B. Randall Dong, both of Simpson, Dong & Wingate, LLC, of Columbia; Daniel W. Williams, of Bedingfield & Williams, of Barnwell, for respondents.
David W. Robinson, II, and J. Kershaw Spong, both of Robinson, McFadden & Moore, of Columbia; William C. Hubbard, John T. Moore, C. Mitchell Brown, B. Rush Smith, III, and Jeffrey A. Jacobs, all of Nelson, Mullins, Riley & Scarborough, of Columbia, for Amici Curiae South Carolina Bankers Association and South Carolina Financial Services.
This is a class action in which the trial court granted respondents (hereafter Buyers) summary judgment. The court ruled that appellant, Pacesetter Corporation, failed to comply with the attorney and insurance agent preference provisions of the South Carolina Consumer Protection Code (CPC). We affirm.
Pacesetter is a Nebraska Corporation which sells aluminum windows, awnings, and doors, in South Carolina. Buyers in this case each entered into a "Retail Installment Sales Contract and Mortgage" to purchase products from Pacesetter, which was to be secured by a mortgage on their homes. The contracts contain the following provision:
OBLIGATIONS PERTAINING TO PROPERTY INSUANCE AND MY REAL ESTATE: 1. I promise to keep my house in good repair and keep it insured for at least 80% of its replacement value by buying fire and extended coverage insurance policy. The insurance company must be approved by you, ... and the company must agree that it will not cancel my policy without first telling you. I authorize the insurance company to pay you directly for any loss. You can choose to use this insurance payment to either repay any amounts I owe you or to repair my house. I have the option of providing property insurance through an existing policy or through a policy independently obtained and paid for by me ... 5. If I do not insure my house or fulfill my obligations to my real estate, then you can do it for me (but you do not have to). If you do pay any of these obligations for me, I agree to pay you back on demand plus interest. Until I pay you back, these amounts will be added to my debt to you which is secured by my real estate and house. I know that if you decide to buy insurance for me you do not have to obtain any homeowner or liability insurance.
Subsequent to entering the contracts, Buyers instituted this action pursuant to S.C.Code Ann. § 37-2-413, contending Pacesetter failed to ascertain their preference of attorney and insurance agent, in violation of S.C.Code Ann. § 37-10-102.1 They sought damages pursuant to S.C.Code Ann. § 37-10-105,2 and requested class certification. Pacesetter moved to dismiss, contending the remedies provided by section 37-10-105 were not applicable to the "Consumer Credit Sales" in question, and that two of the causes of action (those of the Woods and Tilley) were barred by the statute of limitations. Judge Henry Floyd denied Pacesetter's motion to dismiss and granted plaintiffs' motion for class certification.
Thereafter, Judge Rodney Peeples granted Buyers summary judgment on the issue of liability, finding Pacesetter had failed to obtain Buyers' preference as to attorney and insurance agent, in violation of section 37-2-413(2).
Pacesetter contends section 37-2-413(2) is inapplicable to this case. We disagree. Whenever a consumer credit sale is secured in whole or in part by a lien on real estate, section 37-2-413(2) makes the attorney and insurance preference provisions of section 37-10-102(a) applicable if the seller requires the debtor to purchase insurance or pay any attorney's fees in connection with examining the title and closing the transaction.
Essentially, Pacesetter contends section 37-2-413(2) does not require the preference notice where, as here, buyers are permitted to provide insurance themselves through an existing policy, and are not charged a premium by the lender. We disagree.
If a statute's language is plain and unambiguous, and conveys a clear and definite meaning, there is no occasion for employing rules of statutory interpretation and the court has no right to look for or impose another meaning. Paschal v. State Election Comm'n, 317 S.C. 434, 454 S.E.2d 890 (1995); Carolina Power & Light Co. v. City of Bennettsville, 314 S.C. 137, 442 S.E.2d 177 (1994).
It is undisputed that Pacesetter's contracts contain a provision in which the buyer promises to "buy ... a fire and extended coverage insurance policy," and which permits Pacesetter to do so if the buyer fails to do so. Buyers are contractually required to purchase insurance on their homes.3 The trial court correctly ruled there was no genuine issue of material fact concerning this issue.
Pacesetter next contends the court erred in finding that once the preference provisions were triggered with regard to insurance notification, the seller was also required to give notice of an attorney preference, regardless of whether an attorney was actually employed in connection with the transaction, and regardless of whether the debtor was required to pay any attorneys fees. It contends the attorney preference notice is required only if the debtor is actually required to pay an attorney's fee. We disagree.
The literal terms of the statute require that whenever the seller requires the debtor to purchase insurance or pay any attorney's fees, the seller must comply with the preference provisions. Construing this provision liberally, as we must,4 we find the statute unambiguously requires the preference notice as to both attorney and insurance agent whenever the seller requires either the purchase of insurance or the payment of any attorney's fees.5
Finally, Pacesetter contends it substantially complied with the notice requirements of XX-XX-XXX(a), as required by this Court's recent opinion in Davis v. NationsCredit Financial Services Corp., 326 S.C. 83, 484 S.E.2d 471 (1997). We disagree.
Davis was a certified question which addressed the lender's use of a separate piece of paper to ascertain a borrower's preferences of legal counsel and hazard insurance, rather than including a preference statement on the first page of the credit application. Here, there is no separate statement, nor any attorney/insurance preference statement. The mere fact that Pacesetter's contracts gave debtors the "option of providing property insurance through an existing policy or through a policy independently obtained" simply does not meet section 37-10-102(a)'s requirement that the seller "must ascertain the preference of the borrower as to the ... insurance agent to furnish required hazard and flood property insurance ..." Accordingly, the trial court properly ruled Pacesetter had not substantially complied with the statute.
Pacesetter contends the remedies found in section 37-5-202 are the exclusive remedy for a violation of the attorney preference provisions in regard to consumer credit sales. We disagree. Construing the statutes liberally, as required by section 37-1-102,6 we find Buyers may seek the remedies set forth in section 37-10-105.
Section 37-10-101 states that "unless otherwise provided," Chapter 10 of title 37 applies only to designated loan transactions other than consumer loan transactions. Section 37-2-413(2) "otherwise provides," making section 37-10-102(a) applicable whenever the sale is secured by a lien on real estate, and the seller requires the debtor to purchase insurance or pay any attorney's fees in connection with closing the transaction.
Pacesetter contends that, in providing a specific remedy in 37-5-2027 for violations of section 37-2-413, the legislature intended 5-202 as the exclusive remedy. We disagree. Had the Legislature so intended, it could have specifically provided that section 37-5-202 was the exclusive remedy. Accord Hainer v. American Medical International, 328 S.C. 128, 492 S.E.2d 103 (1997)
(). Under a liberal construction of the CPC, we find the section 37-10-105 remedies are available.8
There is no statute of limitations set forth in Chapter 10 of Title 37 for violations of section 37-10-105.9 Judge Floyd ruled the statute of limitations set forth in section 37-5-202 applied (no action pursuant to this subsection may be brought more than one year after the scheduled or accelerated maturity of the debt). We disagree.
Section 37-5-202 provides, in pertinent part, as follows:
(1) If a creditor has violated any provisions of this title applying to ... attorney's fees (§§ 37-2-413 and 37-3-404),... the consumer has a cause of action to recover actual damages and also a right in an action other than a class action, to...
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