Landmark v. Pierce

THE STATE OF SOUTH CAROLINA

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED
ON IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Landmark 501(C)(9) Trust Agreement For The Landmark Group, by and through
its trustees, Michael P. Dunlap, Steven D. Hale, and Roger K. Meagher,
Appellants,

v.

Pierce, Couch, Hendrickson, Baysinger & Green; H. Blanton Brown
& Associates, P.C.; Brown & Sanger, PC; and Young Clement Rivers
& Tisdale, LLP, Respondents.

Appeal From Charleston County

 A. Victor Rawl, Circuit Court Judge

Unpublished Opinion No. 2004-UP-371

Heard April 6, 2004 – Filed June 17, 2004

AFFIRMED

A. Camden Lewis and Peter D. Protopapas, both of Columbia, for
Appellants.                                                                                           

Carl E. Pierce, II, Joseph C. Wilson, IV, M. Dawes Cooke, Jr., all
of Charleston; Susan P. McWilliams and Nikole Setzler Mergo, both of
Columbia, for Respondents.   

PER CURIAM: Landmark 501(C)(9) Trust Agreement
for the Landmark Group, by and through its trustees, Michael P. Dunlap, Steven
D. Hale, and Roger K. Meagher (“Appellants”) brought this legal malpractice
action against Pierce, Couch, Hendrickson, Baysinger & Green; H. Blanton
Brown & Associates, P.C.; Brown & Sanger, P.C.; and Young Clement Rivers
& Tisdale, LLP (“Respondents”). Appellants allege that Respondents were
negligent in pursuing a case that lacked legal merit, or in the alternative,
improperly handled the litigation. The trial judge granted Respondents’ motions
for summary judgment, finding the claims were barred by the statute of limitations,
collateral estoppel, and res judicata. We affirm.
[1]

FACTS

The Landmark group owned and managed golf resorts
across the country. In 1988, Landmark’s parent company, Clock Tower Place Investments,
Ltd., established a self-funded health and welfare plan for its employees called
the Landmark Group Insurance Program  (“the Plan”). The Plan was set up as an
Employee Welfare Benefit Plan in accordance with ERISA.  In 1991, Landmark declared
bankruptcy and was soon controlled by the Resolution Trust Corporation (“RTC”). 
RTC created the Landmark Trust (“the Trust”) to oversee the Plan during the
bankruptcy and receivership.  In 1993, RTC hired Gloria Robinson as the Plan
administrator and appointed Michael Welch and V. Jackson Carney (“Original Trustees”)
as the trustees of the Trust. Robinson eventually learned that Landmark had
paid more than one million dollars in benefits out of the Plan to certain unqualified,
independent contractors [2] and
their dependents.

In November of 1995, the Trust submitted
a case memorandum to RTC requesting the allocation of funds to Clock Tower to
repay the amount of the ineligible claims to the Trust.  RTC denied the claim. 
The following month, Robinson and the Original Trustees hired Respondents and
filed an action (“Robinson I”) against Landmark, Clock Tower, the FDIC, and
RTC seeking reimbursement for the payments to the ineligible independent contractors.
Clock Tower counterclaimed against the Original Trustees on behalf of the Trust,
alleging Robinson and the Original Trustees breached their fiduciary duty and
wasted the Trust’s assets by hiring Respondents to pursue Robinson I.  On March
28, 1996, the trial court dismissed Robinson’s  and the Original Trustees’ claims
for lack of subject matter jurisdiction.  Clock Tower continued to pursue its
counterclaims. [3]   On April
25, 1996, Clock Tower informed the Original Trustees they would be removed effective
May 26, 1996.  Clock Tower then replaced the Original Trustees with Michael
Dunlap, Steven Hale, and Roger Meagher (“Appellant Trustees”).  Dunlap was appointed
on March 8, 1996, and Hale and Meagher on June 1, 1996.  The Appellant Trustees
are former employees of the FDIC. 

On June 13, 1996, Appellant Trustees
fired Respondents. In April of 1997, Clock Tower, acting on behalf of the Trust
and with assistance from the Appellant Trustees, moved to disgorge attorneys’
fees from the Original Trustees and Respondents.  The trial court granted the
motion in part and ordered Respondents to return all fees unused as of June
13, 1996.  On August 31, 1997, the Plan was terminated due to lack of employees
or Plan participants. 

Appellants filed the current action on May 28, 1999.  They alleged that Respondents
were negligent and performed unnecessary work. Appellants sought to disgorge
the fees paid to Respondents.  Respondents filed motions for summary judgment. 
At the August 10, 2001 hearing, the trial court granted Respondents’ motions,
deeming Appellants’ claim barred by the statute of limitations, collateral estoppel
and res judicata.  This appeal followed.

ISSUES

I.  
Did the trial court err in finding that this action is barred
under the statute of limitations?

II. 
Did the trial court err in finding that this action is barred
under res judicata because of the previous action to disgorge payments?

III. 
Did the trial court err in finding this action is barred under
the settlement and release from the previous action?

IV.
Did the trial court ignore evidence of Appellants’ damages?

STANDARD OF REVIEW

“When reviewing the grant of a summary judgment motion, the appellate court
applies the same standard which governs the trial court under Rule 56(c), SCRCP:
summary judgment is proper when there is no genuine issue as to any material
fact and the moving party is entitled to judgment as a matter of law.”  Baril
v. Aiken Reg’l Med. Ctr., 352 S.C. 271, 279, 573 S.E.2d 830, 835 (Ct. App.
2002).  “Summary judgment is appropriate where the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.”  Id. at 280,
573 S.E.2d at 835.

LAW/ANALYSIS 

Appellants argue that the trial court erred in finding that the
statute of limitations had expired prior to the commencement of this action. 
We disagree. 

Under Rule 3(b), SCRCP, an action is commenced, and the statute of limitations
tolled, by filing and serving the summons and complaint.  The statute of limitations
“upon a contract, obligation, or liability, express or implied” expires after
three years.  S.C. Code Ann. § 15-3-530 (Supp. 2003). The statute of limitations
on a negligence claim accrues at the time of the negligence or when facts and
circumstances would put a person of common knowledge on notice of a possible
claim against another party.  § 15-3-535.  Under the discovery rule, an action
accrues when the injury is discovered or should have been discovered by reasonable
diligence.  Strong v. Univ. of S.C. Sch. of Med., 316 S.C. 189, 190,
465 S.E.2d 850, 852 (1994).  The injured party is not required to comprehend
the full extent of the damage or the exact nature of the wrong to start the
running of the statute.  Dean v. Ruscon Corp., 321 S.C. 360, 364, 468
S.E.2d 645, 647 (1996).  All that is required is that the party have inquiry
notice of a possible claim.  Binkley v. Burry, 352 S.C. 286, 297, 573
S.E.2d 838, 844 (Ct. App. 2002). 

The complaint in this action was served on Respondents on May 28, 1999, but
at least one trustee, Michael Dunlap, had constructive notice of a claim prior
to May 28, 1996 because Clock Tower’s counterclaim was a matter of public record
as of February 1996. See Berry v. McLeod, 328 S.C. 435, 445, 492
S.E.2d 794, 799 (Ct. App. 1997) (“An individual on inquiry or constructive notice
is held to be on notice of the contents of documents filed in conformity with
applicable statutory law, which an inquiry would have revealed.”). Therefore,
the trial judge was correct to rule that this action is barred by the statute
of limitations.

In addition to constructive notice, Dunlap also had actual notice. He had been
an FDIC employee from 1990 to February 1996 and became a trustee on March 8,
1996. He admits that he knew Robinson I was pending and could have obtained
the pleadings at any time. [4]  
Moreover, Dunlap was copied with Clock Tower’s letter terminating the Original
Trustees and barring them from making further payments to Respondents.  He was
also copied with the May 1, 1996 letter informing the Original Trustees they
would be held personally accountable for the payments to Respondents.  Additionally,
on May 23, 1996, Respondents actually provided Dunlap with a copy of Clock Tower’s
Answer and Counterclaim.  On May 26, 1996, the Original Trustees were removed
and Dunlap became the sole trustee. 

We find that Dunlap, as a trustee, had the knowledge and ability to act against
Respondents prior to May 28, 1996. That knowledge is imputed to the other trustees.
See Dorman v. Campbell, 331 S.C. 179, 185, 500 S.E.2d 786, 789
(Ct. App. 1998) (affirming that “a principal is affected with . . . knowledge
of all [information] of which his agent receives notice while acting within
the scope of his authority”) (citing Crystal Ice Co. of Columbia, Inc. v.
First Colonial Corp., 273 S.C. 306, 309, 257 S.E.2d 496, 497 (1979)). Therefore,
this action cannot lie.

As Appellants’ action is time-barred, we do not reach the remaining issues
on appeal. [5]

CONCLUSION 

Based on the above, we find that the trial court properly granted Respondents’
motions for summary judgment.  Accordingly, the decision is 

AFFIRMED.

HEARN, C.J., and ANDERSON and BEATTY, JJ., concur.

[1] We decide this case without oral argument pursuant
to Rule 215, SCACR.

[2] The independent contractors were golf pros for
the resorts.

[3] On September 1, 2000, Clock Tower,
Appellants, and the Original Trustees entered into a settlement agreement
that released the Original Trustees from any liability in connection with
payments to Respondents and acknowledged that the Original Trustees fulfilled
their fiduciary obligations to the Trust and the Plan. 

[4] The trial court dismissed the Original Trustees’
claims in Robinson I on March 28, 1996, but that was after Dunlap had become
a trustee.

[5] See Futch v. McAllister Towing of Georgetown,
Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (explaining that appellate
courts need not review remaining issues when the disposition of a prior issue
is dispositive).