Chart House v. PlamettoClub

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

Chart House, Inc., a Delaware Corporation,       
Appellant,

v.

Palmetto Bay Club Owners’ Association, Inc., a/k/a Palmetto Bay Club
HPR; Palmetto Bay Horizontal Property Regime; Cross Island Associates, LLC; W.G.
Shuckers, Inc.; Brighton Bay Associates, LP; and the Yacht Club
of Hilton Head Island,        Defendants,

of whom Palmetto Bay Club Owners’ Association, a/k/a Palmetto Bay Club
HPR is        Respondent.

Appeal From Beaufort County

Jackson V. Gregory, Circuit Court Judge

Gerald C. Smoak, Circuit Court Judge

Unpublished Opinion No. 2004-UP-634

Heard October 13, 2004 – Filed December
15, 2004

REVERSED

James B. Richardson, Jr., of Columbia, for Appellant.

Otto W. Ferrene, of Hilton Head, for Respondent.

HEARN, C.J.:  Chart House, Inc.,
appeals an order of the circuit court granting summary judgment to Palmetto
Bay Club Owners’ Association, a/k/a Palmetto Bay Club HPR (“Palmetto Bay Club”)
and dismissing Palmetto Bay Club from the case.  We reverse.

FACTS

On November 1, 1978, CHE, Inc., entered
into a twenty-five year ground lease for the Chart House Restaurant property
at Palmetto Bay Marina on Hilton Head Island.  The Appellant, Chart House, Inc.,
is CHE’s successor in interest.  Palmetto Bay Marina, a partnership entity,
was the lessor of the property at that time.  The ground lease granted a leasehold
interest in the Chart House property, “together with all present and future
improvements, Lessor’s easements, rights of way, servitudes and appurtenances
in adjoining and adjacent land . . . .”  This lease was never recorded. 

Prior to 1982, Palmetto Bay Marina owned
the entire marina area.  Palmetto Bay Marina split into two separate partnerships
known as Marina Development Associates and Palmetto Bay Associates.  On October
5, 1982, Palmetto Bay Marina conveyed a portion of the real property adjacent
to the Chart House tract, including the parcel now owned by Palmetto Bay Club,
to Marina Development.  Palmetto Bay Marina assigned the parcel leased to Chart
House to Palmetto Bay Associates. 

On October 8, 1982, Marina Development
and Palmetto Bay Associates granted each other, by means of a cross easement
agreement, reciprocal easements for ingress, egress, and parking in the area
between the two properties.  This easement was to run with the title to the
Chart House property.  Chart House joined in the agreement “for the sole purpose
of consenting to the easements, rights and privileges granted pursuant [to the
agreement] to the extent such easements, rights and privileges affect[ed] the
Chart House property.”  This document was subsequently recorded. 

On the same date, Chart House entered
into a “First Amendment and Modification” agreement (“Amended Agreement”) with
Palmetto Bay Associates, its new lessor.  The Amended Agreement referenced both
the ground lease and the cross easement agreement, and purported to “amend and
modify” the ground lease.  The parties also executed and recorded a “Memorandum
of Lease,” which referenced the original ground lease.  The Amended Agreement
substituted Palmetto Bay Associates for Palmetto Bay Marina as lessor.  In addition,
the Amended Agreement contained a section entitled “Substitution of Property,”
which described the leased premises,  substituting “Exhibit A” of the Amended
Agreement for “Exhibit A” of the ground lease.  This section also contained
a release clause providing that “CHE hereby acknowledges and agrees that it
shall from and after the date hereof have no rights whatsoever in and to any
real property under the Lease except for the Property described in the attached
Exhibit “A.” 

At issue is the scope of the effect of
the release clause.  Chart House contends, and Palmetto Bay Club does not deny,
that the substitution of property was necessary to conform the ground lease’s
description of the premises to the redrawn property lines as a result of the
conveyance from Palmetto Bay Marina to Marina Development.  Therefore, Chart
House argues that the above-referenced language was intended only as a release
of all claims of interest to the real property under the ground lease.  Palmetto
Bay Club’s contention is that this language modified not only the ground lease,
but the cross easement agreement as well, so as to divest Chart House of any
interest in the ingress/egress and parking easement over the Marina Development
property.

On March 28, 2001, Chart House filed
suit naming several defendants, including Palmetto Bay Club.  The complaint
alleged causes of action for (1) nuisance, (2) breach of covenants, and (3)
trespass based on Chart House’s rights under both the ground lease, as modified
by the Amended Agreement, and the cross easement agreement.  The causes of action
for nuisance and trespass dealt with parking and named all the defendants. 
However, the cause of action for breach of covenant not to compete named only
Cross Island Associates, LLC, and its lessee, W.G. Shuckers, Inc., and alleged
a breach of the covenant not to compete between Chart House and Palmetto Bay
Marina contained in the ground lease, which prohibited Palmetto Bay Marina or
its successors from engaging in the restaurant business. 

Both Cross Island and
Palmetto Bay Club subsequently moved for partial summary judgment on five nearly
identical grounds, all of which went to the enforceability of the ground lease. 
Palmetto Bay Club’s motion also contained a sixth ground, as follows: “That
a finding that any of the above are decided in favor of the movant, result [sic]
in an order dismissing the movant from the first, second and third causes of
action.”  Both motions were argued together at Palmetto Bay Club’s request. 
At the hearing, counsel for Cross Island specified that its motion was directed
solely at the covenant not to compete contained in the ground lease and the
effect of the Amended Agreement on the lease.  The trial court granted summary
judgment to both Cross Island and Palmetto Bay Club on the breach of the covenant
not to compete claim.  The court also dismissed both defendants from the action,
holding that the release language in the Amended Agreement quoted above operated
to divest Chart House of any interest in any property other than its leasehold. 

Chart House filed a
timely motion to reconsider, which was denied by Judge Gregory. [1]   Chart House appealed from the
order granting summary judgment to Palmetto Bay Club. 

STANDARD OF REVIEW

“Summary judgment is appropriate
when it is clear there is no genuine issue of material fact and the conclusions
and inferences to be drawn from the facts are undisputed.”  McClanahan v.
Richland County Council, 350 S.C. 433, 437, 567 S.E.2d 240, 242 (2002) (citation
omitted).  Additionally, in ruling on a motion for summary judgment, a reviewing
court must view the evidence in the light most favorable to the non-moving party. 
Id. at 438, 567 S.E.2d at 242.  Summary judgment is a drastic remedy. 
Therefore, it “should be cautiously invoked so that a litigant will not be improperly
deprived of trial on disputed factual issues.”  Cunningham ex rel. Grice
v. Helping Hands, Inc., 352 S.C. 485, 491, 575 S.E.2d 549, 552 (2003) (citation
omitted).

LAW/ANALYSIS

Chart House argues that the trial court
violated its due process rights in granting summary judgment to Palmetto Bay
Club based on grounds not pled in its motion.  We agree.

“It is an error of law for a
court to decide a case on a ground not before it.”  Griffin v. Capital Cash,
310 S.C. 288, 294, 423 S.E.2d 143, 147 (Ct. App. 1992) (citation omitted). 
“Due process requires that a litigant be placed on notice of the issues which
the court is to consider.”  Bass v. Bass, 272 S.C. 177, 180, 249 S.E.2d
905, 906 (1978).  “One of the basic purposes of a notice of motion is to apprise
the opposing party of the relief sought and the grounds therefore.”  Turbeville
v. Floyd, 288 S.C. 171, 174, 341 S.E.2d 651, 652 (Ct. App. 1986) (quoting
Skinner v. Skinner, 257 S.C. 544, 549, 186 S.E.2d 523, 526 (1972)). 
Thus, a court ordinarily may not grant relief beyond the scope of the notice. 
Id.  A limited exception to this rule exists when a ground not included
in the notice of the motion is nevertheless fully argued before the court without
objection.  See Salvo v. Hewitt, Coleman & Assocs., 274 S.C.
34, 39, 260 S.E.2d 708, 711 (1979).

In the instant case, Palmetto
Bay Club moved for summary judgment on grounds substantially similar to those
in Cross Island’s motion, and requested that the motions be argued together. 
At the beginning of the hearing, Cross Island made it very clear that its argument
was limited to the breach of covenant issue in Chart House’s second cause of
action.  Neither in the notice of motion nor during the hearing did Palmetto
Bay Club apprise Chart House that it was arguing the parking easement issue. 
All of the grounds listed in the notice of motion went to the enforceability
of the ground lease.  Palmetto Bay Club did include an averment in its notice
requesting that a finding in its favor result in its release on all three causes
of action.  However, this vague request did not in any way place Chart House
on notice of its theory that one provision in the amended lease agreement effectively
nullified a separate agreement Chart House executed that same day with different
parties.  In other words, although Palmetto Bay Club’s notice of motion was
sufficient to apprise Chart House of the “relief sought,” it failed to sufficiently
allege the “grounds therefore.”  See Turbeville, 288 S.C. at 174,
341 S.E.2d at 652. 

Because summary judgment was granted
on grounds that were not included in the motion and were not fully argued at
the hearing, we hold that the trial court erred in granting summary judgment
and dismissing Palmetto Bay Club from the case.  Accordingly, the order of the
trial court is

REVERSED and REMANDED. [2]

HUFF and KITTREDGE, JJ., concur.

[1] The trial judge, Judge Gerald C. Smoak, Sr., retired
subsequent to the trial and was replaced by Judge Jackson V. Gregory. 

[2] We decline to address Chart House’s remaining issues on appeal. 
See Futch v. McAllister Towing of Georgetown, Inc., 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).