June 27, 2012 South Carolina published opinions

Supreme Court

In the Matter of Gloria Y Leevy

Leevy, in a disciplinary agreement with the Bar, admitted ethics violations in eight matters which involved failure to prosecute cases, communicate with clients, communicate with substitute counsel failure to reconcile her client trust fund, issuing a check on her trust fund when there were no client funds in the account and failure to return unearned fees. She also told the Court she could not currently function as an attorney due to depression. The Court suspended Leevy for three years and ordered her to pay the costs of her disciplinary prosecution and pass several ethics courses.

Freemantle v Preston

The Anderson County Commission granted a severance package to the county executive significantly larger than the one called for in his employment contract. The Commission met in executive session and did not list the severance agreement on the agenda. Freemantle brought suit to set aside the agreement and alleging violations of the South Caronia Freedom of information Act. The trial court dismissed for lack of standing, legislative immunity and the existence of a parallel suit. The Court unanimously affirmed in part and reversed in part. It held Freemantle lacked traditional standing as his claim was based on taxpayer status which made his injury common to all taxpayers. It held the “public importance” exception did not apply as Freemantle sought common law money damages and there was no need for future guidance on personnel choices in Anderson County. It reversed on FOIA standing holding citizens seeking injunctive relief, as in this case, have standing without meeting any other requirements. The court summarily reversed the dismissal on legislative immunity grounds as that defense must be proved at trial and the duplicative suit doctrine as the two suits compared were not substantially similar. The FOIA claim was remanded for further proceedings.

Dutch Fork Development Group II LLC v SEL Properties LLC

Dutch Fork and SEL entered development agreements for several subdivisions. SEL delayed some financing required by the contracts. Dutch Fork claimed these delays led to deterioration of the subdivisions roads and a delay in selling certain lots. SEL eventually terminated the development contract and entered into a new development agreement with a third party. Dutch Fork brought suit against SEL for breach of contract and against the managing member of SEL for conversion and tortuous interference with contract. After presentation of evidence, the trial court directed verdicts for Dutch Fork on breach of contract liability and for the managing member on the conversion claim. The jury returned judgment against SEL on breach and against the managing member for tortuous interference. The SEL claim was settled and the Court of Appeals certified the appeal to the Supreme Court. The Court unanimously reversed. It held that managing members of an LLC can be liable for tortuous interference when they commit wrongfully interfere outside the scope of their authority. The Court noted the operating agreement was not in the record making it impossible to determine if the manager member acted outside the scope of his authority. It also held that the acts relied on by Dutch Fork to establish liability (sale of land, change in development plans, terminating the development agreement and entering a development contract with a third party) were attributable to SEL and no evidence existed in the record to demonstrate they were done outside the managing member’s authority. The Court held that the sale of certain lots to another company owned by the managing member benefited SEL and thus could not form the basis of liability. Judgment for damages was therefore reversed.

Court of Appeals

Ford v Beaufort County Assessor

The Fords owned a home in Hilton Head. During 2008, they rented out their home for total of 99 days. An anonymous tipster informed Beaufort County of the rental activity. Based on their independent investigation, the County levied 2008 real estate taxes at 6% instead of the 4% rate for primary residences. The fords appealed to administrative law court which upheld the 6% assessment. The panel affirmed. It held that the 4% rate statute prohibiting that rate for rental property applied to legal residences which are rented and that the sole exception in the statute only allows 14 days of rental in a tax year. As the Fords rented out their residence for 99 days in 2008, they were not eligible for the 4% rate.

Deborah Rice-Marko v Wachovia Corporation

Rice-Marko and other shareholders brought suit against Wachovia and officers for the fall in value of their shares. They alleged that by misrepresenting the affairs of the company, Wachovia and the other defendants induced them to not sell shares. The business court dismissed the case holding that there was no direct claim for the loss in value, there was no spate injury and there was no duty to them. The panel affirmed. It held that the evidence did not establish any special duty to the plaintiffs different from the duty to all shareholders. It also held that loss in stick value is not separate and distinct from the loss to the corporation. Thus, the claims could only be brought in a derivative suit. The panel noted this conclusion was consistent with a recent North Carolina opinion on the subject. It rejected a choice of law argument as well.

State v David Lee Meggett

Meggett was convicted of first degree burglary and sexual assault. On appeal, he argued his conviction should be reversed because the trial court erred in denying his continuance motion, his motion for a mistrial and his motion for directed verdict on the burglary count. The Panel Affirmed. It held the trial court did not abuse its discretion in denying the continuance motion as the case had been pending for two years and there was no evidence the comforter he wanted to test had any probative evidence on it. The panel held the motion for mistrial was properly denied as the solicitors comments about the trial not supporting a conclusion that the victim was a prostitute was an acceptable comment on the evidence. The panel finally rejected the directed verdict claim as South Carolina Supreme Court precedent allows an inference of intent to commit a crime when a defendant enters a dwelling and commits sexual assault.

Lawrence Keeter v Alpine International Towers, Inc.

Keeter, a high school student, while being lowered on a climbing wall, fell twenty feet to the ground shattering vertebrae and becoming paralyzed. He and his parents brought suit against Alpine for strict liability, negligent design and negligent training. A jury awarded judgment to Keeter and his parents. The trial court denied postjudgment motions for new trial, judgment notwithstanding the verdict and apportionment. It required Keeter to choose his remedy and set off a settlement from the verdict. On appeal, the panel affirmed in part and reversed in part. The panel majority affirmed the strict liability verdict as evidence was presented that an automatic rope stop was available and feasible. The panel majority affirmed the negligent design judgment as Alpine knew that human error caused almost all accidents on the climbing wall and the warning materials provided the school did not contain warnings about the need for a faculty member to be within reach of the supporting rope at all times. The negligent training verdict was affirmed as Alpine failed to train the faculty as to how to train the students and failed to warn that all students who would lower climbers must be tested before being allowed to serve as the spotter. The panel majority rejected a claim that the actions of the school and the student who lowered Keeter were intervening causes as they were actually foreseen by Alpine as evidenced by their training materials. The panel majority found the evidence presented as described in the sufficiency sections was also sufficient to submit the issue of punitive damages to the jury. On Keeter’s appeal, the panel majority held only one remedy for one injury was sought and thus there was no election to be made. As the confusion resulted from the trial court’s jury form and the jury meant for the three damage awards to be cumulative, the panel majority determined that the three awards, which came within a range indicated by the jury in a note during deliberations, were not inconsistent and the full amount awarded should be entered against Alpine. One judge concurred as to Alpine and concurred in result only as to Keeter. He argued that the jury should have been individually poled on its intent, but, under the facts of this case, intent to cumulate the award was manifest.

State v Stephens http://www.sccourts.org/opinions/HTMLFiles/COA/4996.pdf

Stephens was convicted of murder. On appeal, he argued that admitting a photo lineup prejudiced him because a mug shot suggests he had a criminal history and the lineup was cumulative to the in court identification. The panel affirmed holding the defense strategy of attacking the photo identification made the value of the actual lineup greater, rendered the admission not cumulative and the mug shot argument had no merit as the photos gave no indication they were from arrest photos instead of driver licenses.



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