South Carolina Court of Appeals Opinions for March 4, 2015

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On Wednesday, March 4, 2015, the South Carolina Court of Appeals published three opinions: SC Public Interest Foundation v. SCDOT, Mason v. Mason, and State v. Looper.

SC Public Interest Foundation v. SCDOT was a declaratory action brought by the SC Public Interest Foundation and Edward Sloan against SCDOT and John Walsh, Deputy Secretary of Transportation at SCDOT.

The issue arose when the City of Aiken and Woodside Plantation Property Owners’ Association sought to have SCDOT inspect three wooden bridges located within the gated housing development.  After the inspection, an employee reported improper use of SCDOT employees to SCDOT’s Office of the Chief Internal Auditor (OCIA).  OCIA investigated and determined that, “SCDOT has no obligation to inspect bridges on private property”.

Appellants filed an action seeking a declaration that SCDOT actions, in inspecting the privately owned bridges in Woodside at the City’s request, was a violation of Article X, sections 5 and 11 of the South Carolina Constitution. Appellants also sought costs and attorneys’ fees under section 15-77-300 of the S.C. Code. The circuit court granted SCDOT’s motion for summary judgment and dismissed the complaint.

Appellants appealed the decision of the lower court on the grounds that the court erred: 1.) in failing to grant them standing based on public importance, 2.) in failing to grant them taxpayer standing;  3.) in failing to apply several exceptions to the mootness doctrine.

The Court disagreed with the Appellants on the first two grounds, finding that the Appellants did not have standing based on public importance or taxpayer standing. On the first ground, the Court reasoned that because SCDOT has conducted its own audit and concluded its own actions were improper, there was no “future guidance’ to be provided by this court and thus standing could not be acquired under the ‘public importance’ exception.

On the second ground, the Court found the Appellants did not have taxpayer standing reasoning that there is not a public interest involved in preventing the unlawful expenditure of inspecting private bridges when SCDOT has already determined its own policy prohibits the action. See Sloan v. Greenville Cnty., 606 S.E.2d 464 (2004)

On the third ground, the Court found that none of the exceptions to the mootness doctrine applied to the Appellants.

Based on the Court’s resolution of the issues of standing and mootness, it did not address the remaining issues of violations of Article X, sections 5 and 11 of the South Carolina Constitution.

Mason v. Mason  is a shareholder dispute case. In this case, Joseph E. Mason Jr. (“Son”) appealed the decision of a special referee granting judgment against him on the following causes of action: breach of contract, breach of fiduciary duty, wrongful termination, and civil conspiracy in favor of Catherine L. Mason (“Mother”), Joseph E. Mason, Sr. (“Father”), Kathy St. Blanchard (“Daughter”), Mason Holding Company, Inc. (“the Company”) and Irwin Levine (“Accountant”).  Son appealed on the grounds that the special referee erred in not ordering the repurchase of his shares of the Company and in finding for the Masons and the company on their counterclaims. The Court of Appeals affirmed the referee’s decision.

The Company operates five tire and auto service stores. It is a statutory close corporation without a board of directors. The Father, Mother, Son, and Daughter all owned interest in the company. Initially, Son was the store manager of the first store with Daughter and her husband, Ozzie, working at the store. Later on Accountant begin working for the company and both Accountant and Ozzie came to own interest in the Company. Eventually, Son became President of the Company.

When Ozzie, as a result of a motorcycle accident, became a quadriplegic Son and Father disagreed over whether or not Ozzie was entitled to worker’s compensation for the accident. Several disagreements followed over Son’s actions taken as president of the Company that led shareholders to elect Father as president and Son as vice president. Son made several attempts at different times to purchase more of the Company, sell his shares of the Company and encourage a potential sale of the Company to which the Masons collectively refused.  The Masons discovered that Son had made fraudulent adjustments to the records of the Company, that increased inventory as a part of an alleged casing scheme. When Son attempted to fire the bookkeeper over discrepancies found, Father rehired her because he believed they needed to look into the matter further. Son then filed a complaint against the Masons and the Company asserting the four causes of action and seeking relief pursuant to section 33-14-300 to -330 of the South Carolina Code. All parties agreed to have a special referee decide the case.  The special referee found for Respondents on all of Son’s causes of action determining that nothing in the record indicated the Masons deviated from the appropriate standard of conduct and that Son’s unclean hands from his conduct prevented him from relying on an action for stockholder oppression or breach of fiduciary duty. Subsequently, the special referee denied the Rule 59(e), SCRCP, motion and Son appealed.

The Court found, after reviewing the evidence,that the special referee did not err and affirmed all of the special referees decisions.

In State v. Looper, the Court dismissed an appeal of the circuit court’s order which reversed the magistrate court’s order dismissing a charge of driving under the influence. Looper moved to dismiss a DUI charger in magistrate court arguing that the evidence should be suppressed. The magistrate court suppressed the evidence and dismissed the charge; the State appealed and the circuit court reversed.  Looper appealed the court’s decision. The Court found that the order was not immediately appealable,  and thus dismissed the appeal.

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