John Hine v. Timothy McCrory

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

John M. Hine and Maria W. Hine, Appellants,

v.

Timothy M. McCrory, individually and as agent, Michael
P. McCrory, Seabrook L. Marchant, and The Marchant
Company, Respondents.

Appellate Case No. 2019-001375

Appeal From Greenville County
Robin B. Stilwell, Circuit Court Judge

Unpublished Opinion No. 2023-UP-241
Heard September 12, 2022 – Filed June 14, 2023

AFFIRMED

John Michael Hine, of The Hine Law Firm, LLC, of
Greenville, Matthew Todd Carroll, of Womble Bond
Dickinson (US), LLP, and Bryant Sparks Caldwell, both
of Columbia, all for Appellants.

David Allen Anderson, Carmen Vaughn Ganjehsani, and
James Belford Robey, III, of Richardson Plowden &
Robinson, PA, of Columbia, for Respondents Timothy
M. McCrory, Seabrook L. Marchant, and The Marchant
Company. Hunter Chase Harbin, of Law Office of H.
Chase Harbin, PA, of Greenville, for Respondent
Michael P. McCrory.

PER CURIAM: John and Marie Hine (collectively, Appellants) appeal the circuit
court's order granting summary judgment to Timothy "Tim" McCrory, Michael
"Mike" McCrory, Seabrook Marchant, and The Marchant Company (collectively,
Respondents), arguing the court erred in finding Appellants' 2012 discovery of a
rather minor amount of undisclosed termite damage put them on notice as to more
extensive damage discovered in another part of their home in 2018. We affirm.

Facts and Procedural History

On September 7, 2005, Tim McCrory and his brother, Mike, jointly purchased 416
Leyswood Drive in Greenville County (the Property), a single-story ranch house
with a partially finished basement. After renovating a portion of the house, the
McCrorys listed it for sale on May 14, 2008. 1 In their residential property
condition disclosure statement (the Disclosure Statement), the McCrorys stated:
"The two rooms in the basement were framed out, sheetrocked in 2005. Hardwood
floors were added. There used to be paneling for the walls and we ripped that out
to add wood studs (2x4) and sheetrock. Ask seller for all work done." The
Disclosure Statement did not indicate whether the Property was under a termite
bond during the time of the McCrorys' ownership.

On May 27, 2008, Appellants contracted with the McCrorys for the purchase and
sale of the Property for $175,000. Hunter Pest Elimination, LLC, issued a CL-100
Wood Infestation Report (the Report) on June 3, 2008, indicating there were signs
of past termite infestation and treatment. Mr. Hine signed the Report at the July 1,
2008 closing. While the Report noted some areas of the Property were obstructed
from view or inaccessible, it stated "previous infestation/scorn marks from termite
shelter tubes with damage to sills, joist and subfloor was noted right side of garage
and to sill right rear of garage." The Report further mentioned "prior
treatment/drill holes to exterior foundation wall [indicating] previous termite
treatment," "fungi/wood destroying fungi present throughout the basement area,"
and "discolored wood around HVAC duct boot rear of utility room." Although the
Report noted repairs had been made, it stated "some damage remains and should be
evaluated by a licensed builder." The Report specified the damage "[w]ill not be

1
Tim McCrory, a realtor, was The Marchant Company's listing agent for the
Property. Seabrook Marchant was the broker-in-charge.
corrected by this company; recommend that structure be thoroughly and
completely evaluated by a qualified building expert . . . and that needed repairs be
made." 2 Likewise, Pillar to Post, Inc. issued a June 3, 2008 home inspection report
recommending Appellants consult "a qualified foundation contractor to evaluate
and correct pest damage at joists located near center to rear area of
garage/basement area to promote intended use." 3

Almost four years later, on April 27, 2012, Mr. Hine removed the shoe molding in
a bedroom on the front corner of the Property to paint the baseboards and noticed a
large gap formed as the molding got closer to the exterior of the house. Upon
further inspection, he discovered caulk or silicone had been injected into this gap.
After fully removing the shoe molding, Mr. Hine found extensive damage to the
wood studs behind the drywall and called a contractor to further inspect the area.
The contractor discovered damaged rim joists, damage to a double joist running
above the cinderblock wall in the basement room below the main floor bedroom,
and damage to the headers of both windows in an upper bedroom.

On May 14, 2012, Mr. Hine sent a demand letter to Marchant stating:

This letter is being sent to you as a result of Timothy's
status as the Seller's Agent and his employment by you.
When the work was done in the basement, as noted in
Paragraph 13 of the Disclosure, the damage would have
been discovered and subsequently was required to be
disclosed. As a result of the failure to disclose the
damage I have incurred extensive costs. Timothy owed a
duty as the listing Agent to disclose the damage which
was not repaired. Pursuant to § 27-50-70 of the South
Carolina Code the listing agent is liable for the
misrepresentation.

2
On June 6, 2008, Benjamin Shivers of Ben Construction, Inc. performed a
builder's inspection as recommended by Hunter Pest Elimination and concluded
the damage listed in the Report "is not structural and does not require repair."
3
On June 9, 2008, Steve Baty of Realty Service & Repair, LLC, performed an
inspection as recommended by Pillar to Post and determined "[t]he repairs to the
floor joists in the basement at the center and rear appear adequate, and no
additional repairs to these appear necessary at this time."
Respondents denied any knowledge of the damage and declined to reimburse.
Following the completion of these repairs, Mr. Hine sent an additional demand
letter on July 9, 2012, requesting payment of $4000. 4

In early 2013, Mr. Hine contacted Sargent Pest Solutions to inspect and place the
Property under an active termite bond contract. Sargent Pest Solutions inspected
the Property on March 28, 2013, and contracted with Hine for treatment of
"Existing (Affected wood and live termites)." This contract also contained a
notation of "PHD" (possible hidden damage). Although repeatedly asked at oral
argument, Appellants were unable to answer affirmatively that Sargent Pest
Solutions conducted a full termite inspection of the Property in 2013. Moreover,
Mr. Hine conceded in his deposition that he did not ask the contractor who made
the 2012-2013 repairs to conduct exploratory testing to locate possible additional
termite damage that might exist in other areas of the home.

Appellants subsequently remodeled a hallway bathroom without incident. They
also "pulled out everything in the basement" and noted no damage in that area of
the house. However, during a bathroom renovation on February 3, 2018,
Appellants discovered significant termite damage extending beyond the main
bathroom to the basement stairwell and surrounding structural framing. Appellants
also found that some of this framing had been patched together with short sections
of two-by-four wood studs and then covered with drywall. 5

On June 18, 2018, Appellants brought suit against the McCrorys, Marchant, and
The Marchant Company, asserting claims for fraud, conversion, negligence, and a
variety of statutory violations. Respondents denied knowledge or concealment of
unrepaired termite damage.

Following discovery, Respondents moved for summary judgment, asserting
Appellants' claims were barred by the statute of limitations. In opposition,
Appellants argued it would be objectively unreasonable to believe they should
have known about over $100,000 of termite damage running from the main

4
In his deposition, Mr. Hine testified he did not include this damage in the 2018
lawsuit because "[he did not] know that [he had] the evidence to prove that, and
[he did not] know that [he was] still entitled to it under the statute of limitations."
5
The two-by-four wood studs had a bar code stamp date of September 7, 2005, the
time period when the McCrory brothers purchased the home.
bathroom to the framing of the staircase because they had previously discovered a
relatively minor amount of termite activity on the opposite side of the house. The
circuit court granted Respondents' motion for summary judgment, finding
Appellants' claims were time barred. Appellants subsequently filed a Rule 59(e),
SCRCP, motion to amend, which the circuit court denied.

Standard of Review

"When reviewing a grant of summary judgment, appellate courts apply the same
standard applied by the trial court pursuant to Rule 56(c), SCRCP." Turner v.
Milliman, 392 S.C. 116, 121–22, 708 S.E.2d 766, 769 (2011). "In determining
whether any triable issues of fact exist, the evidence and all inferences which can
be reasonably drawn from the evidence must be viewed in the light most favorable
to the nonmoving party." Hancock v. Mid-South Mgmt. Co., Inc., 381 S.C. 326,
329–30, 673 S.E.2d 801, 802 (2009). "Summary judgment is appropriate when a
plaintiff does not commence an action within the applicable statute of limitations."
McMaster v. Dewitt, 411 S.C. 138, 143, 767 S.E.2d 451, 453 (Ct. App. 2014).

Law and Analysis

I. Summary Judgment

Appellants argue the circuit court erred in finding the statute of limitations barred
their claims because the parties presented conflicting evidence regarding when
Appellants could or should have known a cause of action might exist regarding the
undisclosed termite damage. Appellants contend application of the discovery rule
and the determination of the date the statute began to run present questions of fact
for a jury. In the alternative, Appellants ask this court to set aside any statute of
limitations issues as a matter of equity. We find the circuit court properly granted
summary judgment.

The parties agree the three-year statute of limitations applies. S.C. Code Ann.
§ 15-3-530(5) (2005) (providing a three-year statute of limitations for an action for
"any injury to the person or rights of another, not arising on contract and not
enumerated by law). "Generally, a cause of action accrues under South Carolina
law 'the moment the defendant breaches a duty owed to the plaintiff.'" Barr v. City
of Rock Hill, 330 S.C. 640, 644, 500 S.E.2d 157, 159–60 (Ct. App. 1998) (quoting
Grooms v. Med. Soc'y of S.C., 298 S.C. 399, 402, 380 S.E.2d 855, 857 (Ct. App.
1989)); see also Barr, 330 S.C. at 645–46, 500 S.E.2d at 160 (holding although
homeowner did not realize "the magnitude of the problem" until August 1992, the
circuit court correctly found prior termite inspection reports provided sufficient
notice to trigger the running of the statute of limitations). "Under the discovery
rule, . . . the statutory period of limitations begins to run when a person could or
should have known, through the exercise of reasonable diligence, that a cause of
action might exist in his or her favor, rather than when a person obtains actual
knowledge of either the potential claim or of the facts giving rise thereto."
Stokes-Craven Holding Corp. v. Robinson, 416 S.C. 517, 525–26, 787 S.E.2d 485,
489–90 (2016) (internal citations and quotations omitted); see also S.C. Code Ann.
§ 15-3-535 (2005) ("[A]ll actions initiated under Section 15-3-530(5) must be
commenced within three years after the person knew or by the exercise of
reasonable diligence should have known that he had a cause of action.").

Our supreme court has "interpreted the 'exercise of reasonable diligence' to mean
that the injured party must act with some promptness" when on notice of a
potential claim. Dean v. Ruscon Corp., 321 S.C. 360, 363–64, 468 S.E.2d 645,
647 (1996). "[T]he fact that the injured party may not comprehend the full extent
of the damage is immaterial." Id. at 364, 468 S.E.2d at 647. Nevertheless, when
the parties present conflicting evidence, application of the discovery rule and the
determination of the date the statute began to run in a particular case are questions
of fact for the jury. See Arant v. Kressler, 327 S.C. 225, 229, 489 S.E.2d 206, 208
(1997) (when testimony conflicts regarding the time of discovery of a cause of
action, it becomes an issue for the jury to decide).

In McAlhany v. Carter, which Appellants argue is controlling, the circuit court
granted the defendants' motion for summary judgment based on the statute of
limitations. 415 S.C. 54, 57, 781 S.E.2d 105, 107 (Ct. App. 2015). At issue was
the plaintiff's deposition testimony regarding when he discovered mold and
termites in his home. Id. at 60–61, 781 S.E.2d at 109. This court reversed the
circuit court's grant of summary judgment, finding:

McAlhany's uncontradicted testimony was that he saw
active termites in the home on the day he moved in,
which would have been late October 2007, and he knew
in October 2007 that Carter had not done its job properly.
Because McAlhany was aware of termites in the home in
late October 2007, and he knew the October CL-100
erroneously stated there were not active termites in the
home, a reasonable person would have been on notice of
a potential negligence claim against Carter for termite
damage. Nevertheless, a reasonable person would not
have been on notice of a potential negligence claim for
mold damage. As Kenneth testified, "Mold has nothing
to do with infestation of termites." Rather, the three-year
statute of limitations for McAlhany's property damage
claim did not accrue until a reasonable person would
have discovered mold within the home. Because
McAlhany presented evidence that he did not discover
mold within the home until June 2008 or August 2009,
which would have made his lawsuit timely filed in April
2011, the trial court erred in granting summary judgment
as to the property damage claim.

Id. at 66, 781 S.E.2d at 112 (internal citations omitted).

Unlike the situation in McAlhany, there is no conflicting evidence here as to when
Appellants first discovered unrepaired termite damage at the Property. McAlhany
also involved two distinct harms—termite damage and mold damage. Here,
Appellants discovered a relatively minor amount of unrepaired termite damage in
2012, and six years later discovered more significant unrepaired termite damage in
another area of the home.

Our supreme court rejected a similar "two distinct harms" argument in Dean,
finding the circuit court correctly directed a verdict for a construction company
whose pile driving damaged a nearby property. Dean, 321 S.C. at 366, 468 S.E.2d
at 648. Although the court acknowledged Dean may not have comprehended that
the original fine crack she discovered in 1984 would expand and cause the
building's façade to buckle, Dean's "subsequent failure to act with reasonable
diligence" did not justify tolling the statute of limitations. Id. at 365–66, 468
S.E.2d at 648. The court found the statute of limitations began to run when Dean
initially discovered the first small crack—not when she found a larger crack at a
different location and learned the building was no longer structurally sound. 6

6
After oral argument, Appellants properly provided the supplemental citation of
Walbeck v. The I'On Co., Op. No. 28134 (S.C. Sup. Ct. filed Feb. 8, 2023)
(Howard Adv. Sh. No. 6, at 23, 30–34), in support of their argument that the circuit
court erred in finding the statute of limitations barred their claims. However, the
facts of Walbeck differ markedly from those presented here. Stoneledge at Lake
Keowee Owners' Association, Inc. v. IMK Development Co., LLC, 425 S.C. 268,
821 S.E.2d 504 (Ct. App. 2018), aff'd in part and rev'd in part, 435 S.C. 176, 866
S.E.2d 577 (2021), Holly Woods Association of Residence Owners v. Hiller, 392
The undisputed evidence in this record demonstrates that when Appellants learned
there was unrepaired termite damage on the Property in 2012, they promptly
notified Respondents of their claim in the May 14, 2012 letter. Although
Appellants did not realize the magnitude of the problem until 2018, we agree with
the circuit court that the 2012 discovery triggered the running of the statute of
limitations. See, e.g., Allwin v. Russ Cooper Assocs., Inc., 426 S.C. 1, 17, 825
S.E.2d 707, 715 (Ct. App. 2019) (finding despite property owner's "actual
knowledge of her potential claims for this damage—and repeated repair
recommendations—[she] failed to pursue her claims in a timely manner" and
property owner's "failure to comprehend the magnitude of the water intrusion and
other defective conditions is immaterial.").

While Appellants contend they acted reasonably in not conducting destructive
testing in 2012 to determine whether the Property had additional unrepaired termite
damage, such does not negate the fact that they were on notice that "some claim
against another party might exist." Gibson v. Bank of Am., N.A., 383 S.C. 399,
406, 680 S.E.2d 778, 782 (Ct. App. 2009). The issue here is whether Appellants
acted with promptness in pursuing their legal claims, not whether they acted
reasonably in repairing the termite damage discovered in 2012, or in discovering
additional concealed termite damage. The undisputed evidence in the record
shows Appellants either knew or should have known about unrepaired termite
damage at the Property on or about April 27, 2012. Appellants informed
Respondents of potential claims against them by letter dated May 14, 2012.
Nevertheless, Appellants did not file suit until June 18, 2018, almost three years
after the statute of limitations expired.

II. Equitable Tolling

Appellants further urge this court to set aside the statute of limitations as a matter
of equity. "[E]quitable tolling is a doctrine that should be used sparingly and only
when the interests of justice compel its use." Hooper v. Ebenezer Senior Servs. &
Rehab. Ctr., 386 S.C. 108, 117, 687 S.E.2d 29, 33 (2009). "The party claiming the

S.C. 172, 183, 708 S.E.2d 787, 793 (Ct. App. 2011), Santee Portland Cement Co.
v. Daniel International Corp., 299 S.C. 269, 384 S.E.2d 693 (1989), overruled on
other grounds by Atlas Food Systems & Services, Inc. v. Crane National Vendors
Division of Unidynamics Corp., 319 S.C. 556, 462 S.E.2d 858 (1995), and Box v.
Sparrow Group, LLC, Op. No. 2018-UP-353, 2018 WL 3913504 (S.C. Ct. App.
Filed Aug. 15, 2018), discussed in Appellants' briefing, are likewise
distinguishable.
statute of limitations should be tolled bears the burden of establishing sufficient
facts to justify its use." Id. at 115, 687 S.E.2d at 32. "It has been observed that
'[e]quitable tolling typically applies in cases where a litigant was prevented from
filing suit because of an extraordinary event beyond his or her control.'" Id. at 116,
687 S.E.2d at 32 (quoting Ocana v. Am. Furniture Co., 91 P.3d 58, 66 (2004)).

Other than the presence of caulking and the replacement wood found during the
2018 bathroom renovation, Appellants have not shown the existence of any
extraordinary circumstance preventing them from filing a lawsuit within three
years after discovering the caulking and termite damage in 2012. Mr. Hine knew
he had a potential claim in 2012 when he sent not one but two demand letters to
Marchant. However, in 2012, Appellants failed to follow through with their threat
of legal action against Respondents and are unable to point to any conduct by
Respondents preventing their filing after the 2012 discovery of unrepaired termite
damage. Instead, Appellants focus on their argument that the McCrorys covered
up more extreme termite damage when they flipped the Property and the only way
Appellants could have discovered the fraudulent conduct would have been through
destructive testing. While the McCrorys' actions were, at best, a band aid
employed to fix the underlying termite problem, their arguably deceptive acts are
not the type of "extraordinary event" that would justify equitable tolling—
particularly as the exercise of reasonable diligence would have revealed the extent
of the termite problem as early as 2012.

Conclusion

For the foregoing reasons, the circuit court's order granting Respondents' motion
for summary judgment is

AFFIRMED.

GEATHERS and MCDONALD, JJ., and HILL, A.J., concur.