Carpenter v. Measter

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Dudley N. Carpenter and Jane G. Carpenter,
Respondents/Appellants,

v.

Charles L. Measter and Barbara P. Measter,
Appellants/Respondents.

Appellate Case No. 2011-192366

Appeal From Charleston County
R. Markley Dennis, Jr., Circuit Court Judge

Unpublished Opinion No. 2013-UP-066
Heard December 12, 2012 – Filed February 6, 2013

AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED

D. Ryan McCabe and Brian C. Gambrell, of Rogers,
Townsend & Thomas, PC, of Columbia, for
Appellants/Respondents.

Thomas C. Hildebrand, Jr., of Haynsworth Sinkler Boyd,
P.A., of Charleston, for Respondents/Appellants.
PER CURIAM: This case involves a contract to sell a condominium unit in
Bohicket Marina Village, a horizontal property regime on Seabrook Island.
Appellants/Respondents, Charles and Barbara Measter (Sellers), seek review of the
circuit court's failure to grant a directed verdict or judgment notwithstanding the
verdict (JNOV) on the breach of contract claim filed by Respondents/Appellants,
Dudley and Jane Carpenter (Purchasers). In their cross-appeal, Purchasers
challenge the circuit court's granting of Sellers' motion for a directed verdict on
Purchasers' claim for violation of the Residential Property Condition Disclosure
Act (Disclosure Act), S.C. Code Ann. § 27-50-10 to -270 (2007 & Supp. 2012).
We affirm in part, reverse in part, and remand.

1. Initially, we reject Sellers' argument that the circuit court lacked jurisdiction to
issue its order dated February 23, 2010 (Sellers' Issue 1). Sellers challenge this
order as an untimely revision of the circuit court's previous decision granting
partial summary judgment to Sellers. They argue that Purchasers' voluntary
dismissal of their claim for violation of the Unfair Trade Practices Act ended the
period provided by Rule 54(b), SCRCP, for revision of the previous decision. Rule
54(b), SCRCP, provides that an order or other form of decision adjudicating fewer
than all the claims and omitting an express determination that there is "no just
reason for delay," is subject to revision at any time before "the entry of judgment
adjudicating all the claims . . . ."

Here, Circuit Court Judge Markley Dennis, Jr., issued a Form 4 judgment dated
September 3, 2009, that granted Sellers' motion for summary judgment as to
Purchasers' claims for fraud and negligent misrepresentation. The judgment
expressly denied the motion as to Purchasers' claim for violation of the Unfair
Trade Practices Act but remained silent as to Purchasers' remaining claims for
breach of contract, breach of contract accompanied by a fraudulent act, and
violation of the Disclosure Act. Judge Dennis's February 23, 2010 order clarified
his intent, as it existed on September 3, 2009, to deny Sellers' summary judgment
motion as to these remaining three claims. The February 23, 2010 order explained
that (1) Judge Dennis's September 3, 2009 ruling was based on the economic loss
rule; (2) as a result, he intended to grant summary judgment as to Purchasers' tort
claims; and (3) he intended to deny summary judgment as to Purchasers' contract-
based claims and statutory claims.

Because the February 23, 2010 order did not take any new action but merely
placed in the record evidence of Judge Dennis's intent as it existed on September 3,
2009, Judge Dennis properly directed that the February 23, 2010 order was to take
effect "nunc pro tunc." See Ex parte Strom, 343 S.C. 257, 264, 539 S.E.2d 699,
702-03 (2000) ("Nunc pro tunc orders can only be used to place in the record
evidence of judicial action that has actually taken place. A prerequisite for a nunc
pro tunc order . . . is some previous action by the court that is not adequately
reflected in its record." (citation omitted)); see also Black's Law Dictionary 1174
(9th ed. 2009) (explaining that "nunc pro tunc" is Latin for "now for then" and that
the phrase means having retroactive legal effect through a court's inherent power);
id. ("When an order is signed 'nunc pro tunc' as of a specified date, it means that a
thing is now done which should have been done on the specified date." (quoting
35A C.J.S. Federal Civil Procedure § 370 (1960))).

The nunc pro tunc effect of the February 23, 2010 order was actually contemplated
by a previous Form 4 judgment dated November 4, 2009, and signed by Circuit
Court Judge Deadra Jefferson. Sellers contend that this judgment was a "judgment
adjudicating all the claims" for purposes of Rule 54(b). However, this judgment
indicated that although Purchasers were voluntarily dismissing their claim for
violation of the Unfair Trade Practices Act, they were going to file a motion
seeking clarification of Judge Dennis's September 3, 2009 judgment.1 While Judge
Jefferson checked the boxes next to the words "ACTION DISMISSED" and "Rule
41(a), SCRCP," she expressly conditioned such a dismissal on Judge Dennis's
contemplated ruling on Purchasers' motion to clarify:

[I]n the interests of justice and for clarity of the record
for appellate purposes [Purchasers] will file a Motion to
Clarify Judge Dennis'[s] order. After Judge Dennis's
consideration of the motion if there is remaining any
cause of action the matter will be restored to the jury trial
roster for trial and if none remains the matter will be
ended with prejudice so that the parties may avail
themselves of the appellate process.

(emphasis added). Hence, Judge Jefferson's Form 4 judgment was conditional and
did not qualify as a "judgment adjudicating all the claims" for purposes of Rule
54(b). Therefore, Judge Dennis had jurisdiction to issue his order dated February
23, 2010, and he properly gave the order retroactive effect.

1
Notably, Purchasers agreed to file this motion at the urging of Judge Jefferson.
2. As to Purchasers' breach of contract claim (Sellers' Issues 2 and 4), the circuit
court properly declined to rule as a matter of law that there existed no breach of
contract. See Law v. S.C. Dep't of Corr., 368 S.C. 424, 434, 629 S.E.2d 642, 648
(2006) (holding that in ruling on a motion for a directed verdict, the trial court
must view the evidence and the inferences reasonably drawn therefrom in the light
most favorable to the party opposing the motion); McMillan v. Oconee Mem'l
Hosp., Inc., 367 S.C. 559, 564, 626 S.E.2d 884, 886 (2006) (holding that the trial
court should deny a directed verdict motion when either the evidence yields more
than one inference or its inference is in doubt). There is ample evidence of Sellers'
breach of the contract's implied covenant that the parties must act in good faith and
deal fairly with each other. See Williams v. Riedman, 339 S.C. 251, 267, 529
S.E.2d 28, 36 (Ct. App. 2000) ("[T]here exists in every contract an implied
covenant of good faith and fair dealing." (citation omitted)). We note that
Purchasers did not attempt to assert the covenant of good faith and fair dealing as
an independent cause of action, as argued by Sellers. See RoTec Servs., Inc. v.
Encompass Servs., Inc., 359 S.C. 467, 473, 597 S.E.2d 881, 884 (Ct. App. 2004)
(holding that the implied covenant of good faith and fair dealing is not an
independent cause of action separate from the claim for breach of contract).
Rather, Purchasers asserted a cause of action for breach of contract, and Sellers'
liability may be based on a breach of any of the contract's terms, including the
implied covenant of good faith, as long as the breach caused damage to Purchasers.
See Williams, 339 S.C. at 274, 529 S.E.2d at 40 ("[T]he implied covenant of good
faith and fair dealing has been viewed as another contract term." (emphasis
added)).

In the light most favorable to Purchasers, the evidence shows that Sellers knew of
the structural problems with the regime's buildings and the resulting class action
litigation that ultimately yielded funds with which to reimburse unit owners for
repairs. Further, in the light most favorable to Purchasers, Sellers' admitted
consultations with multiple attorneys as to whether they had a duty to disclose this
information to Purchasers demonstrates Sellers' awareness that the buildings'
structural problems and impending repairs directly affected the unit they were
selling to Purchasers. Therefore, we affirm the circuit court's denial of Sellers'
motions for a directed verdict and JNOV on the breach of contract claim. See
Steinke v. S.C. Dep't of Labor, Licensing & Regulation, 336 S.C. 373, 386, 520
S.E.2d 142, 148 (1999) (holding that an appellate court will only reverse the trial
court's ruling when no evidence supports the ruling or when the ruling is controlled
by an error of law). Likewise, to the extent that Sellers adequately objected and
assigned error to the jury instruction on the implied covenant of good faith, we
affirm the instruction. See Keaton ex rel. Foster v. Greenville Hosp. Sys., 334 S.C.
488, 495-96, 514 S.E.2d 570, 574 (1999) (holding that a jury charge that is
substantially correct and covers the law does not require reversal).

3. As to Sellers' argument that the contract's disclaimer and other provisions
required dismissal of the breach of contract claim (Sellers' Issue 3), the remedy
they seek is reversal of the circuit court's "rulings that did not dismiss [Purchasers']
breach of contract claims as a matter of law." However, the record does not show
that Sellers raised these precise issues in their directed verdict motion because
Sellers did not include in the record a copy of their pre-trial brief, on which they
relied in seeking a directed verdict. Further, the circuit court did not address these
precise issues in denying the directed verdict motion as to the breach of contract
claim. Therefore, these issues are not preserved for review. See Rule 210(h),
SCACR (stating that the appellate court will not consider any fact which does not
appear in the Record on Appeal); In re McCracken, 346 S.C. 87, 93, 551 S.E.2d
235, 238 (2001) (holding that a JNOV motion was not preserved because no
grounds were raised in the requisite directed verdict motion); Zaman v. S.C. Bd. of
Med. Exam'rs, 305 S.C. 281, 285, 408 S.E.2d 213, 215 (1991) (holding that the
record must show the issue was raised in the trial court); Germain v. Nichol, 278
S.C. 508, 509, 299 S.E.2d 335, 335 (1983) ("Appellant has the burden of providing
this Court with a sufficient record upon which this Court can make its decision.");
Weston v. Kim's Dollar Store, 385 S.C. 520, 538, 684 S.E.2d 769, 779 (Ct. App.
2009), aff'd and remanded, 399 S.C. 303, 731 S.E.2d 864 (2012) (declining to
address an argument because the court was unable to discern whether the appellant
raised to the circuit court the issues on appeal; appellant’s motion seeking
amendment of the circuit court’s order did not appear in the record); State v.
Kennerly, 331 S.C. 442, 455, 503 S.E.2d 214, 221 (Ct. App. 1998), aff'd, 337 S.C.
617, 524 S.E.2d 837 (1999) ("In reviewing a denial of directed verdict, issues not
raised to the trial court in support of the directed verdict motion are not preserved
for appellate review.").

4. As to Sellers' challenge to the jury's damages award (Sellers' Issue 5), the record
does not reflect Sellers' presentation of this issue to the circuit court after the jury
returned the verdict. Therefore, the issue is not preserved for our review. See S.C.
Dep't of Transp. v. First Carolina Corp. of S.C., 372 S.C. 295, 301, 641 S.E.2d
903, 907 (2007) ("It is axiomatic that an issue cannot be raised for the first time on
appeal, but must have been raised to and ruled upon by the trial judge to be
preserved for appellate review." (citation omitted)).
5. As to Sellers' merger argument (Sellers' Issue 6), the record does not show that
Sellers raised this issue in their directed verdict motion because Sellers did not
include in the record a copy of their pre-trial brief, on which they relied in seeking
a directed verdict. Further, the circuit court did not address this issue in denying
the directed verdict motion as to the breach of contract claim. Therefore, this issue
is not preserved for review. See Rule 210(h), SCACR (stating that the appellate
court will not consider any fact which does not appear in the Record on Appeal);
Zaman v. S.C. Bd. of Med. Exam'rs, 305 S.C. 281, 285, 408 S.E.2d 213, 215 (1991)
(holding that the record must show the issue was raised in the trial court); Germain
v. Nichol, 278 S.C. 508, 509, 299 S.E.2d 335, 335 (1983) ("Appellant has the
burden of providing this Court with a sufficient record upon which this Court can
make its decision."); Weston v. Kim's Dollar Store, 385 S.C. 520, 538, 684 S.E.2d
769, 779 (Ct. App. 2009), aff'd and remanded, 399 S.C. 303, 731 S.E.2d 864
(2012) (declining to address an argument because the court was unable to discern
whether the appellant raised to the circuit court the issues on appeal; appellant’s
motion seeking amendment of the circuit court’s order did not appear in the
record); State v. Kennerly, 331 S.C. 442, 455, 503 S.E.2d 214, 221 (Ct. App.
1998), aff'd, 337 S.C. 617, 524 S.E.2d 837 (1999) ("In reviewing a denial of
directed verdict, issues not raised to the trial court in support of the directed verdict
motion are not preserved for appellate review.").

6. As to the trial court's failure to provide Sellers with a copy of Purchasers' pre-
trial brief, Sellers did not set forth this assignment of error in their Statement of
Issues on Appeal. Therefore, we need not consider it. See Rule 208(b)(1)(B)
("Ordinarily, no point will be considered which is not set forth in the statement of
the issues on appeal."). In any event, the precise arguments set forth in Sellers'
appellate brief to support this assignment of error were not presented to the trial
court. Rather, Sellers' counsel acquiesced in the trial court's ruling on his request
to order Purchasers to provide him with a copy of the brief. Therefore, Sellers'
arguments on appeal of this ruling are not preserved for review. See First Carolina,
372 S.C. at 301, 641 S.E.2d at 907 ("[I]t is a litigant's duty to bring to the court's
attention any perceived error, and the failure to do so amounts to a waiver of the
alleged error."); id. ("It is axiomatic that an issue cannot be raised for the first time
on appeal, but must have been raised to and ruled upon by the trial judge to be
preserved for appellate review." (citation omitted)); cf. State v. Mitchell, 330 S.C.
189, 195, 498 S.E.2d 642, 645 (1998) (holding that because counsel acquiesced in
the trial court's ruling regarding his request for the solicitor's entire file on an
eyewitness and made no other objections regarding wanting the criminal files,
appellant was barred from raising the issue on appeal); Hollins v. Wal-Mart Stores,
Inc., 381 S.C. 245, 251, 672 S.E.2d 805, 808 (Ct. App. 2008) (holding that because
a party acquiesced in the trial court's denial of additional voir dire, she failed to
preserve the issue for appellate review).

7. As to Purchasers' claim for violation of the Disclosure Act (Purchasers' Issue 1),
we agree with Purchasers that the circuit court erred in granting Sellers' directed
verdict motion and in denying Purchasers' directed verdict motion. Under the
Disclosure Act, an "owner" who "discloses any material information on the
disclosure statement that he knows to be false, incomplete, or misleading is liable
for actual damages proximately caused to the purchaser and court costs." S.C.
Code Ann. § 27-50-65 (2007). The Act defines "owner" as "each person having a
recorded present or future interest in real estate who is identified in a real estate
contract subject to this article . . . ." S.C. Code Ann. § 27-50-10(4) (2007). Section
27-50-10(4) further states "This disclosure is limited to the actual residential
dwelling and does not address common elements or areas for which the owner has
no direct and primary responsibility." It is this "common elements exception" to
the Disclosure Act on which the circuit court based its directed verdict ruling in the
present case.

Sellers urge the court to consider the definition of "General Common Elements" set
forth in the Horizontal Property Act, S.C. Code Ann. § 27-31-10 to -440 (2007 &
Supp. 2012), for purposes of interpreting the common elements exception to the
Disclosure Act. This definition is set forth in section 27-31-20(f) and includes the
foundations and main walls. They also urge the court to consider the definition of
"Apartments" in the regime's amended Master Deed, which designates the
horizontal boundaries of each apartment unit as the "unfinished inner surfaces of
the ceilings and floors." These definitions likely influenced the circuit court's
ruling. However, to the extent that the foundations, floors, main walls, and
ceilings are inextricably intertwined to a condominium unit such that they directly
affect the unit's intended use and value, the legislature could not have possibly
intended to include them in the common elements exception to the Disclosure Act.
See Unisun Ins. Co. v. Schmidt, 339 S.C. 362, 368, 529 S.E.2d 280, 283 (2000)
(holding that courts will reject a statutory interpretation that would lead to a result
so plainly absurd that it could not have been intended by the legislature or would
defeat the plain legislative intention).

Here, the structural problems with the regime's buildings directly affected the unit
sold to Purchasers and required remediation construction that involved damaging
the unit's flooring and displacing Purchasers from the unit for several months.
Further, there was evidence that these structural problems caused sagging floors in
the unit. Moreover, the class action litigation concerning these structural problems
resulted in the imposition of a special assessment on each unit for building repairs;
each unit owner's share of the proceeds from the class action litigation was
intended to compensate the owner for his or her share of repair costs exacted by the
special assessment.2 There was evidence from which one could reasonably infer
that by the time of closing on the sale of the unit, Sellers were aware of this
impending special assessment.

Notably, had Purchasers not timely paid the special assessment, their title to the
unit would have been encumbered. See Harbison Cmty. Ass'n, Inc. v. Mueller, 319
S.C. 99, 102, 459 S.E.2d 860, 862 (Ct. App. 1995) ("Covenants requiring property
owners to pay fees for improvements, maintenance or other services to a
homeowners association run with the land." (citation omitted)). Consistent with
our opinion in Mueller, section 9.04 of the By-Laws of the regime's council of co-
owners states that all assessments "chargeable to any Apartment [that] are unpaid
after becoming due . . . shall constitute a lien against such Apartment . . . ." This
invokes item 20 of Sellers' Disclosure Statement, which includes an inquiry into
Sellers' knowledge of any "[l]awsuits, foreclosures, bankruptcy, tenancies,
judgments, tax or other liens, proposed assessments or notice from any
governmental agency that could affect title to the property[,]" as well as item 21,
which includes an inquiry into "[o]wners' association fees or 'common area'
expenses or assessments." (emphasis added).

Although Sellers checked "Yes" next to item 21 to acknowledge routine regime
assessments, they did not notify Purchasers of the council's announced repair plans,
which necessarily generated the subsequent special assessment. The note "Check
with seller before submitting offer" located at the bottom of the Disclosure
Statement, without more, does not constitute an adequate disclosure, and the record
does not show that Purchasers were provided with copies of minutes of past
meetings of the council prior to or at closing.

2
Sellers' argument that the class action litigation was a matter of public record that
Purchasers should have discovered is unavailing. The Disclosure Act requires
disclosure of several matters of public record. See S.C. Code Ann. § 27-50-
40(A)(5) (2007) (requiring disclosure of "the zoning laws, restrictive covenants,
building codes, and other land-use restrictions affecting the real property, any
encroachment of the real property from or to adjacent real property, and notice
from a governmental agency affecting this real property").
The record unequivocally reflects the Sellers' awareness of the class action
litigation, the allegations of the class action complaint, and the status of the
litigation when they entered into the contract of sale with Purchasers. Under even
a liberal construction of these undisputed facts in favor of Sellers, we see no
reasonable possibility of a verdict for Sellers on Purchasers' claim for violation of
the Disclosure Act. See Proctor v. Dep't of Health & Envtl. Control, 368 S.C. 279,
292-93, 628 S.E.2d 496, 503 (Ct. App. 2006) ("In essence, the court must
determine whether a verdict for the opposing party 'would be reasonably possible
under the facts as liberally construed in his favor.'"). The circuit court's directed
verdict for Sellers was not only unsupported by the evidence but also controlled by
a mistaken interpretation of the Disclosure Act. Therefore, we reverse this directed
verdict as well as the circuit court's denial of Purchasers' directed verdict motion
on this claim. See Steinke, 336 S.C. at 386, 520 S.E.2d at 148 (holding that an
appellate court will only reverse the trial court's ruling when no evidence supports
the ruling or when the ruling is controlled by an error of law). We remand for the
entry of a directed verdict for Purchasers on this claim as well as a determination
of attorney's fees pursuant to S.C. Code Ann. § 27-50-65 (2007).

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

HUFF, THOMAS, and GEATHERS, JJ., concur.