BB&T v. Kidwell

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

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

BB&T of South Carolina a/k/a Branch Banking and Trust Company,       
Appellant,

v.

Lisa Smith Kidwell and William Brian Kidwell d/b/a Signature Residential
Mortgage and John Franklin,        Defendants,

Of Whom John H. Franklin is       
Respondent.

Appeal From Spartanburg County

Robert L. Couch, Master in Equity

Unpublished Opinion No. 2005-UP-017

Submitted November 1, 2004 – Filed January
13, 2005

REVERSED

John W. Ray, of

Greenville

, for Appellant.

David G. Ingalls, of

Spartanburg

, for Respondent.

PER CURIAM:  This is an ongoing dispute
between two competing mortgagees originating from a mortgage foreclosure action. 
In a previous appeal, this court determined that BB&T of South Carolina
held first-lien status.  On remand, the master-in-equity ordered John H. Franklin,
the other mortgagee, to hold the rents from the property in trust and to pay
BB&T the principal and interest owed.  The order made specific findings
regarding the amount owed, the rate of interest and the date to which interest
would accrue, and the time for payment.  When Franklin failed to pay BB&T
the entire amount owed, BB&T filed a rule to show cause seeking to hold
Franklin in contempt.  The master reserved jurisdiction over the contempt action,
and pursuant to Franklin’s request, ordered BB&T to provide further information
and witnesses.   BB&T appeals.  We reverse.
[1]  

FACTS

This
appeal stems from an action brought by BB&T to foreclose on real property
owned by Lisa and William Kidwell.  BB&T named John H. Franklin as a necessary
party and defendant.  Franklin counterclaimed alleging he had an $85,000 mortgage
on the property that was entitled to priority over BB&T’s mortgage.  The
master-in-equity determined the Kidwells were liable on both BB&T’s mortgage
and Franklin’s mortgage and ordered a public sale of the property.  Further,
the master determined that Franklin was entitled to first-lien status and therefore
priority over BB&T’s mortgage.  BB&T appealed the master’s ruling. 
Pending the outcome of the appeal, the master stayed the public sale and ordered
that rents from the property be collected and held in trust.  On appeal, this
court reversed, finding BB&T was entitled to first-lien status and remanded
the case to the master “for a recalculation of the total sums due BB&T and
Franklin.”  See BB&T of South Carolina v. Kidwell, 350 S.C.
382, 391, 565 S.E.2d 316, 321 (Ct. App. 2002) (affirming the master’s award
of prejudgment interest on Franklin’s mortgage, but reversing the master’s determination
that Franklin’s mortgage was entitled to priority and remanding for recalculation
of sums due BB&T and Franklin).

On remand, the master determined
that the real property subject to the BB&T and Franklin mortgages had been
sold at a private sale by agreement of the parties and that the sale proceeds
had been held in the attorneys’ trust accounts.  Further, the master determined
that all rents from the property were collected and were being held in trust
by Franklin’s attorney.  The master ordered Franklin to pay to BB&T $106,065.24,
which constituted the principal as well as the interest that had accrued through
January 17, 2001, the date of trial.  The master also ordered Franklin to pay
to BB&T interest in the amount of $27.27 per day for each day following
the trial through August 29, 2002, the date of the order on remand.  These interest
payments totaled $16,062.03.  Additionally, Franklin was ordered to pay interest
in the amount of $27.27 per day for each day after August 29, 2002 through the
date of receipt of the order by BB&T’s counsel or “the ending of any appeal
from this Order, by written notice of the Defendant Franklin or Order of the
appellate courts, whichever shall last occur.”   All rents from the property
were ordered to be held in trust pending a further order or immediately paid
over to BB&T for payment of the principal, interest, and attorney’s fees
due. 

Following the master’s order,
Franklin sent a copy of an undated and unfiled “Notice of Intent to Appeal”
to BB&T.  After repeated requests from BB&T for either a filed appeal
or written notice that Franklin’s appeal had ended, Franklin notified BB&T
that he abandoned his appeal on October 15, 2002.  After BB&T received written
notice that Franklin’s appeal had been abandoned, BB&T’s counsel disbursed
the proceeds held in escrow.  According to BB&T, after disbursing the funds
held in escrow, a shortfall of $3,313.42 remained on the money owed BB&T. 
BB&T requested that Franklin utilize the rents collected from the property
to pay that sum. 

On October 24, 2002, BB&T filed a
rule to show cause seeking to hold Franklin in contempt for failing to provide
a detailed accounting of rents and failing to apply the rents towards satisfaction
of the debt owed to BB&T. 

On October 25, 2002, Franklin sent BB&T
a response [2] and a subpoena
requesting that BB&T produce all records concerning “a mortgage loan to
Lisa S. Kidwell and William Brian Kidwell dated November 5, 1999.”  BB&T
filed a motion to quash the subpoena alleging that the subpoena was improper
because BB&T was a party, that the doctrine of res judicata barred Franklin
from asserting claims, that Franklin should be estopped from engaging in discovery,
and that service was invalid.  BB&T also filed a return to Franklin’s response
asserting, among other allegations, that the issues raised in the response were
barred because they had been previously litigated.  On November 22, 2002, BB&T
filed a “Certificate of No Objection, Return nor Denial to Rule to Show Cause,”
which alleged that Franklin’s response to the rule was unfiled and arguing that
Franklin’s request for a recalculation of interest was affirmative relief which
had been fully decided by the 2001 order, 2002 opinion of this court, and 2002
order on remand.   Additionally, BB&T’s certificate stated that by agreement
of the parties a hearing before the equity court on the rule to show cause was
set for November 22, 2002.

At the hearing, the parties
addressed BB&T’s motion to quash the subpoena.  The master asked Franklin
whether he had received the information requested.  Franklin responded that
based on the information he received, he was not clear when the mortgage on
the property had been paid off.  Franklin asserted that he was only liable to
BB&T for rents on the property up to the date the mortgage was paid off,
and BB&T conceded that point.  Franklin suggested that the mortgage was
paid off prior to the August 29, 2002 date that the master determined interest
was due through.  BB&T asserted, however, that the issue was barred because
Franklin made no objection, made no post-trial motion, or appealed from the
order on remand, which set the dates interest would accrue through.  The master
concluded the hearing by ordering BB&T to provide the court with information
as to when BB&T’s mortgage account was credited with payment and how much
BB&T received. 

The master’s written order determined
that he retained jurisdiction over the matter, ordered BB&T to identify
the person who was the keeper of payments and disbursals made on the Kidwell
account, and ordered that person to be a witness at the merits hearing.  From
this order, BB&T appeals.

LAW/ANALYSIS

BB&T argues the master erred in ordering BB&T to
identify the person who was the keeper of payments and disbursals made on the
Kidwell account and in ordering that person to be a witness at the merits hearing. 
Specifically, BB&T contends that because Franklin never appealed from the
master’s order on remand, the dates set in that order and the amount owed became
the law of the case.  We agree. 

“An unappealed order becomes
the law of the case. ‘A portion of a judgment that is not appealed presents
no issue for determination by the reviewing court and constitutes, rightly or
wrongly, the law of the case.’”  McCall v. State Farm Mut. Auto Ins. Co.,
359 S.C. 372, 378, 597 S.E.2d 181, 184 (Ct. App. 2004) (citations omitted).

In this case, Franklin never
appealed from the master’s order on remand, which (1) held Franklin was liable
on interest that accrued, not only through August 29, 2002, but through the
date BB&T received written notice of the conclusion of any appeal from that
order, and (2) ordered Franklin to hold all rents from the property in trust
pending a further order or immediately pay over rents to BB&T for payment
of the principal, interest, and attorney’s fees due.  Because Franklin never
appealed from this order, Franklin is liable on the interest that accrued through
October 15, 2002, the date Franklin notified BB&T in writing that he abandoned
his appeal.  Moreover, Franklin was obligated by that order to hold all rents
in trust for payment of his liability.  The date that payment was made on the
mortgage was simply irrelevant in light of this order.  

Any argument Franklin had concerning
the date payment was made on the mortgage and its effect on the amount he owed
to BB&T in rents should have been raised on appeal from the order on remand. 
Because Franklin did not appeal from the order on remand, it is the law of the
case.  See id.  Therefore, the master erred in ordering BB&T
to provide any information or witnesses concerning the mortgage payments and
disbursals.

REVERSED. [3]

HEARN, C.J., GOOLSBY
and WILLIAMS, JJ., concur.

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

[2] Franklin’s response does not appear in the record
on appeal. 

[3] We decline to address BB&T’s remaining issues on appeal.  See
Futch v. McAllister Towing of Georgetown, 335 S.C. 598, 613, 518 S.E.2d
591, 598 (1999) (finding that an appellate court need not address remaining
issues when disposition of prior issue is dispositive).