Centura Bank v. Cox

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

Centura Bank, Respondent,

v.

Norma J. Cox, Appellant.

Appeal From Florence County

 B. Hicks Harwell, Jr., Circuit Court
Judge

Unpublished Opinion No. 2004-UP-348

Submitted May 12, 2004 – Filed May 25,
2004

AFFIRMED

Bradford P. Simpson, B. Randall Dong, and Michael J.
Cone, all of Columbia, for Appellant.

Ray Coit Yarborough, Jr., of Florence, for Respondent.

PER CURIAM:  Centura Bank brought this action
against Norma J. Cox for judgment on a note secured by real property.  Cox appeals
the trial court’s grant of summary judgment to Centura on Cox’s counterclaims
(1) that the bank failed to timely obtain her attorney preference as required
by statute and (2) that the contract was unconscionable.  We affirm. [1]

BACKGROUND

Cox had an outstanding loan with Centura
which was secured by a second mortgage on real estate and, in addition, had
several unsecured loans in favor of the bank.  The unsecured loans came due
and Cox planned to pay all her debts to Centura from the sale of her real property,
which was at that time listed for sale.  Centura offered to renew Cox’s unsecured
loans if she consolidated all her debt into a loan secured by the real property
and payable in six months.  Cox agreed and because she was temporarily physically
disabled from a minor auto accident, a Centura employee took the documents to
Cox’s home for her to sign. 

Cox failed to make the payment on the
new note on its maturity date.  When Centura commenced this action more than
a year after the note matured, Cox responded alleging the contract was unconscionable
and obtained in violation South Carolina’s attorney and insurance agent preference
statute.  Her real property, valued at $490,000 in the personal financial statement
she submitted with her application, was no longer on the market when Cox was
deposed.  It remained unlisted throughout the litigation.  Cox explained in
her deposition testimony she still intended to sell the property and pay off
the note, but wanted to wait until the market would generate a price suitable
to her financial needs. 

After a hearing, the trial court granted
Centura’s motion for summary judgment on Cox’s counterclaims.

STANDARD OF REVIEW

The purpose of summary judgment is to expedite the
disposition of cases that do not require the services of a fact finder.  Dawkins
v. Fields, 354 S.C. 58, 69, 580 S.E.2d 433, 438 (2003).  When reviewing
the grant of a summary judgment motion, this court applies the same standard
that 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.  Fleming v. Rose, 350 S.C.
488, 493, 567 S.E.2d 857, 860 (2002). 

In determining whether any triable issue of fact exists,
the evidence and all factual inferences drawn from it must be viewed in a light
most favorable to the nonmoving party.  Sauner v. Public Serv. Auth.,
354 S.C. 397, 404, 581 S.E.2d 161, 165 (2003).  Even if there is no dispute
as to evidentiary facts, but only as to the conclusions to be drawn from them,
summary judgment should be denied.  Pye v. Aycock, 325 S.C. 426, 431,
480 S.E.2d 455, 457 (Ct. App. 1997).  Summary judgment is not appropriate when
further inquiry into the facts is desirable to clarify the application of law. 
Tupper v. Dorchester County, 326 S.C. 318, 325, 487 S.E.2d 187, 191 (1997).

DISCUSSION

I.  The Preference Statute

Cox argues the trial court erred in ruling
she failed to establish the attorney and insurance agent preference statute
applied and in its alternative finding that Centura satisfied the statute. 
We disagree with both contentions.

South Carolina Code section 37-10-102 provides:

Whenever the primary purpose of a loan that is secured
in whole or in part by a lien on real estate is for a personal, family or
household purpose –

(a)     The creditor must ascertain prior to closing
the preference of the borrower as to the legal counsel that is employed to represent
the debtor in all matters of the transaction relating to the closing of the
transaction . . .

The creditor may comply with this section by:

(1)        including the preference information on
or with the credit application . . . or

(2)        providing written notice to the borrower
of the preference information with the notice being delivered or mailed no
later than three business days after the application is received or prepared. 

S.C. Code Ann. § 37-10-102(a) (2002) (emphasis added). 

Cox argues the court erroneously found she
presented no evidence the loaned funds were used for a personal, family, or
household purpose and thus erred in concluding the statute was not triggered. 
Although Cox lived on part of the property she mortgaged, her testimony did
not indicate the purpose of the unsecured debt that was restructured.  However,
as did the trial court, we assume for the purpose of our analysis that the preference
statute applied to this loan and conclude Centura complied with its requirements.

On July 23, 1999, a Centura employee visited
Cox at home to prepare her application.  During this visit, the date the application
was “received or prepared,” Cox signed several documents, including the credit
application and the attorney and insurance agent preference form.  This evidence
establishes Centura ascertained Cox’s preference regarding a closing attorney
simultaneously with the receipt and preparation of the credit application. 

However, Cox contends a material factual
dispute exists regarding the date the application was received and summary judgment
was thus inappropriate.  Although she does not dispute signing all of the relevant
documents on July 23, Cox asserts this does not prove the date she applied for
the loan.  Noting the personal financial statement was dated July 17, Cox argues
this indicates Centura provided her with the application before July 23. 
Relying on this premise, Cox argues there is a factual question whether Centura
failed to provide her with preference information within three days of the application.

We doubt the preference statute requires
anything more of a creditor than ascertaining a borrower’s attorney preference
prior to closing.  The specific portion of the section Cox references merely
describes one way a lender may comply with the statute.  § 37-10-102(a)(2);
see Edge v. State Farm Ins. Co., 345 S.C. 136, 139, 546 S.E.2d
647, 648-49 (2001) (concluding when the term “may” is used, it is meant to be
merely permissive and not a requirement).  However, even if Cox’s interpretation
of the statute is correct, the evidence and factual inferences create no genuine
triable issue regarding whether Centura failed to satisfy the statute’s requirements. 
On the contrary, the evidence shows she signed the attorney preference form
and the credit application on the same day.

II.  Unconscionability

Cox further argues the trial court erred in failing
to fully consider the elements of her unconscionability counterclaim.  She claims
the contract was one of adhesion, that she was unsophisticated and naïvely believed
she could sell the property for $490,000 within six months, and that the sophisticated
Centura took advantage of her limited physical mobility knowing she was in no
position to negotiate.  Again, we find summary judgment was properly granted.

A trial court may refuse to enforce or limit
enforcement of a consumer credit agreement that was unconscionable when it was
made.  See S.C. Code Ann. § 37-5-108(1) (2002).  When making this determination,
a trial judge is to consider several factors outlined in section 37-5-108(4). [2]   Here, the court specifically referenced these statutory factors
before making extensive findings of fact relating to the question.  The court
found, among other things, Cox owns real and personal property that could be
sold to reduce the debt, Centura reasonably relied on Cox’s assurances she was
going to sell the property, the credit contract contains no extraordinary terms,
Cox could have easily gone elsewhere to obtain the loan, and Cox specifically
noted her auto accident “was not a big thing.”  See S.C. Code Ann. §
37-5-108(1)(b) (“any term or part of the agreement or transaction [was] unconscionable
at the time it was made”); § 37-5-108(4)(a) (“belief by the . . . lender at
the time a transaction is entered into that there is no reasonable probability
of payment”); § 37-5-108(4)(e) (“the fact that the . . . lender has knowingly
taken advantage of the inability of the consumer or debtor reasonably to protect
his interests by reason of physical or mental infirmities”). 

Unconscionability is the absence of meaningful choice
on the part of one party caused by one-sided contract provisions together with
terms so oppressive that no reasonable person would make them and no fair and
honest person would accept them.  Munoz v. Green Tree Fin. Corp., 343
S.C. 531, 541, 542 S.E.2d 360, 365 (2001).  The trial court, correctly citing
the statutory factors and several specific facts related to them, determined
the credit contract was neither one-sided nor oppressive.  We conclude the trial
court properly considered all relevant elements of Cox’s counterclaim and correctly
concluded the credit contract was not unconscionable as a matter of law.

AFFIRMED.

HEARN, C.J., and STILWELL and HOWARD, JJ., concur.

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

[2]        Subsection 4 has been amended since the trial court issued
the order on appeal.