Mortgage Electronic Registration Systems, Inc. v. Suite

THE STATE OF SOUTH CAROLINA

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

Mortgage Electronic Registration Systems, Inc., Respondent,

v.

Todd M. Suite and Suzanne Wells, Appellants.

Appeal From Calhoun County

Diane S.
Goodstein, Circuit Court Judge

Unpublished
Opinion No. 2007-UP-272

Submitted May 1,
2007 – Filed June 5, 2007

AFFIRMED

Frederick K. Jones, of Greer, for
Appellants.

Gary H. Johnson, of Columbia, for
Respondent.

PER CURIAM:    Todd M.
Suite and Amy Suzanne Wells appeal the circuit court’s order finding they
waived their objection that Mortgage Electronic Registration Systems, Inc.
(“MERS”) is not a real party in interest and granting summary judgment in favor
of MERS on all of their counterclaims.  We affirm.[1]

FACTS

On April 25, 2001 Suite and Wells executed
a note promising to pay the principal sum of $181,600.00 to CTX Mortgage
Company (“CTX”) at an annual interest rate of 7.25%.  The same day, a mortgage
was granted naming MERS as nominee for CTX.  The mortgage was recorded with the
Calhoun County Clerk of Court on May 4, 2001.  Although Suite affirms his
execution of the mortgage document, there is a factual dispute as to whether Wells’
signature is authentic.

Beginning in December 2002, Suite and
Wells stopped making payments on the mortgage.  In May 2003, MERS filed a
summons and complaint seeking foreclosure on the related property.

In a pre-answer motion and in their
answer, Suite and Wells alleged MERS was not a real party in interest in the
case.  Suite and Wells also filed a counterclaim to MERS foreclosure action. 
They alleged: (1) forgery relating to Wells’ signature on the mortgage
document; (2) breach of contract; (3) breach of contract accompanied by a
fraudulent act; (4) violation of the Unfair Trade Practices Act; and (5)
violation of the Real Estate Settlement Procedures Act (RESPA).  MERS entered
its reply to the counterclaims and the actions were joined. 

On May 19, 2005, MERS filed and served a
motion for summary judgment, arguing the record was devoid of any evidence to
support Suite and Wells’ causes of action.  After holding two separate hearings
on the matter, the circuit court granted MERS summary judgment on all of Suite
and Well’s counterclaims and referred the foreclosure action to the
master-in-equity.  Noting the action had been pending for nearly two and half
years, with multiple depositions taken and numerous discovery documents
exchanged, the circuit judge found the issue relating to MERS’ standing had
never been properly brought before the court and had therefore been waived.

DISCUSSION

A.  Real Party in Interest

Suite and Wells claim that MERS is not a
real party in interest and that they did not waive their objection to this
issue.  We disagree.

Putting the waiver issue aside, it is obvious
that MERS has standing in the case sub judice.  Quite simply, MERS is
listed in the mortgage as the nominee of the mortgage holder.  Furthermore, Suite
and Wells have asserted and prosecuted claims against the company and
represented to the court that the claims were compulsory.  Even if we were to
find the circuit court incorrectly decided Suite and Wells waived the matter,
there has been no reversible error, as MERS is clearly an interested party.

B.  Summary Judgment as to Suite and
Wells’ Counterclaims

Suite and Wells claim the circuit court
erred in granting summary judgment for MERS in regard to their numerous
counterclaims.  We disagree.

When reviewing the grant of summary
judgment, an appellate court applies the same standard that governs the trial
court under Rule 56, 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.” Pittman v. Grand Strand Entm’t, Inc., 363
S.C. 531, 536, 611 S.E.2d 922, 925 (2005); B & B Liquors, Inc. v. O’
Neil, 361 S.C. 267, 603 S.E.2d 629 (Ct. App. 2004). In determining whether
any triable issue of fact exists, the evidence and all inferences that can
reasonably be drawn therefrom must be viewed in the light most favorable to the
nonmoving party.  Medical Univ. of South Carolina v. Arnaud, 360 S.C.
615, 602 S.E.2d 747 (2004).  If triable issues exist, those issues must go to
the jury.  Mulherin-Howell v. Cobb, 362 S.C. 588, 608 S.E.2d 587 (Ct. App.
2005).

The party seeking summary judgment has
the burden of clearly establishing the absence of a genuine issue of material
fact.  McCall v. State Farm Mut. Auto. Ins. Co., 359 S.C. 372, 597
S.E.2d 181 (Ct. App. 2004).  Once the party moving for summary judgment meets
the initial burden of showing an absence of evidentiary support for the opponent’s
case, the opponent to the motion can not simply rest on mere allegations or
denials contained in the pleadings, but must come forward with specific facts
showing there is a genuine issue for trial.  SSI Med. Servs., Inc. v. Cox,
301 S.C. 493, 392 S.E.2d 789 (1990). 

1.  Forgery

Suite and Wells raised the issue of the
alleged forgery as a compulsory counterclaim seeking affirmative relief, not simply
as a defense to the foreclosure action.  The circuit court ruled there was no
such cause of action recognized in South Carolina, and that even in the event such
an action was recognized, the counterclaim would not survive summary judgment,
as there was no evidence as to who forged the signature or regarding damages. 

The circuit court was correct that there
is no such cause of action in this state.  Additionally, Suite and Wells
offered no evidence as to the source of the alleged forgery, but simply alleged
that MERS was the culprit.  Thus, the circuit judge properly granted MERS’
motion for summary judgment as to Suite and Wells’ counterclaim for the alleged
forgery.

2.  Breach of Contract

Included in Suite and Wells’ counterclaims
was a cause of action for breach of contract, more specifically, they allege MERS
breached their contract through improper escrow payments.

Suite and Wells admitted they made no
payments on the note after December 2002.  The lower court ruled the evidence
established they were in arrears on the loan prior to the occurrence of any allegedly
improper escrow payments.  The court found that under the note, timely payments
were a condition precedent to any obligation regarding escrow payments.  A
condition precedent, “unless excused, must exist or occur before a duty of
immediate performance arises.”  Worley v. Yarborough Ford, Inc., 317
S.C. 206, 210, 452 S.E.2d 622, 624 (Ct. App. 1994).  As there was no evidence that
any escrow issues occurred before Suite and Wells went into arrears on the
note, summary judgment on the breach of contract counterclaim was proper.

3. Breach of Contract Accompanied by a
Fraudulent Act

In order to state a claim for breach of
contract accompanied by a fraudulent act, a plaintiff must plead facts
establishing three elements: (1) a breach of contract; (2) fraudulent intent
relating to the breaching of the contract and not merely to its making; and (3)
a fraudulent act accompanying the breach.  Harper v. Ethridge, 290 S.C.
112, 348 S.E.2d 374 (1986).

Suite and Wells failed to put forth
evidence to support a cause of action for breach of contract against MERS.  Moreover,
the record is devoid of any evidence that MERS acted with any fraudulent intent
relating to any alleged breach.  When asked whether he believed MERS committed
fraud on him, Suite responded, “I don’t—I wouldn’t say fraud per se.  I think
that, like I said earlier, there was a lot of confusion . . . .”  Clearly, the
circuit court properly granted summary judgment as to the counterclaim for breach
of contract accompanied by a fraudulent act.

4.  Unfair Trade Practices Act 

The South Carolina Unfair Trade
Practices Act provides: “Unfair methods of competition and unfair or deceptive
acts or practices in the conduct of any trade or commerce are hereby declared
unlawful.”  S.C. Code Ann. § 39-5-20(a) (1985).  “Any person who suffers any
ascertainable loss of money or property, real or personal, as a result of the
use or employment by another person of an unfair or deceptive method, act or
practice declared unlawful by § 39-5-20 may bring an action individually . . .
to recover actual damages.”  S.C. Code Ann. § 39-5-140 (1985).  An unfair trade
practice has been defined as a practice that is “offensive to public policy or
which is immoral, unethical, or oppressive.”  Wogan v. Kunze, 366 S.C.
583, 606, 623 S.E.2d 107, 120 (Ct. App. 2005) (citing deBondt v. Carlton
Motorcars, Inc., 342 S.C. 254, 269, 536 S.E.2d 399, 407 (Ct. App. 2000)).

To be actionable under the act, the
unfair or deceptive act or practice must have an impact upon the public
interest and have the potential for repetition.  Haley Nursery Co. v.
Forrest, 298 S.C. 520, 381 S.E.2d 906 (1989); Burbach v. Investors
Management Corp. Intern., 326 S.C. 492, 484 S.E.2d 119 (Ct. App. 1997).  “The
potential for repetition may be shown in two ways: 1) by showing the same kind
of actions occurred in the past, thus making it likely they will continue to
occur absent deterrence, or 2) by showing the company’s procedures create a
potential for repetition of the unfair and deceptive acts.”  Crary v.
Djebelli, 329 S.C. 385, 388, 496 S.E.2d 21, 23 (1998) (citing Daisy
Outdoor Advertising v. Abbott, 322 S.C. 489, 473 S.E.2d 47 (1996)).

Suite and Wells contend the mortgage
amount was increased on two separate occasions and thus constitutes a violation
of the UTPA.  Even if we were to assume the mortgage was increased as they
allege and in manner offensive to public policy, immoral, unethical, or
oppressive, Suite and Wells failed to produce any evidence that MERS engaged in
similar acts in past or that the company’s procedures created a potential for repetition. 
Thus, summary judgment in regard to the Unfair Trade Practices Act counterclaim
was proper.[2] 
Suite and Wells’ unauthorized practice of law allegation, which is incorporated
into their UTPA argument, was never presented before the circuit court and is
not preserved for review.

5.  RESPA  

In their counterclaims, Suite and Wells
alleged MERS failed to meet RESPA’s requirements as to timely notice of changes
in the holder of their mortgage.  However, it is undisputed the note at issue
was originally held by CTX and is now held by Bank of America, and Suite admits
he received notice of the note’s change of ownership from CTX to Bank of
America on June 25, 2001, a timeframe within RESPA’s guidelines.  Thus, there was
no evidence to create a triable issue of fact regarding Suite and Wells’ claim
that MERS violated RESPA, and the circuit court did not erred in its grant of
summary judgment on the matter.

CONCLUSION

Accordingly, the circuit court’s
decision is

AFFIRMED.

ANDERSON, HUFF, and BEATTY, JJ., concur.

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

[2] The exact act
or acts Suite and Wells contend were violations of the UTPA is not entirely clear. 
Before the circuit court, their argument centered around RESPA and the alleged
forgery.  However, the appeal brief seems to focus only on the alleged increase
in the mortgage amount and unauthorized practice of law.  Regardless, Suite and
Wells have failed to show any evidence as to the likelihood for repetition.