Callawassie Island Members Club v. Martin

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

The Callawassie Island Members Club, Inc., Respondent,

v.

Gregory L. Martin and Rebecca L. Martin, Defendants,

and

The Callawassie Island Members Club, Inc., Respondent,

v.

Michael J. Frey and Grace I. Frey, Defendants,

and

The Callawassie Island Members Club, Inc., Respondent,

v.

Mark K. Quinn and Sherry B. Quinn, Defendants,

Of Whom Gregory L. Martin, Michael J. Frey, and Mark
K. Quinn are the Appellants.

Appellate Case No. 2015-000001

Appeal From Beaufort County
J. Ernest Kinard, Jr., Circuit Court Judge
Unpublished Opinion No. 2019-UP-393
Originally Filed as 2018-UP-178, 2018-UP-179 and 2018-UP-180
Heard May 7, 2019
Withdrawn, Substituted and Refiled December 18, 2019

AFFIRMED

Ian S. Ford and Neil Davis Thomson, both of Ford
Wallace Thomson, LLC, of Charleston, for Appellants.

M. Dawes Cooke, Jr., John William Fletcher, and
Bradley B. Banias, all of Barnwell Whaley Patterson &
Helms, LLC, of Charleston; Stephen P. Hughes, of
Howell Gibson & Hughes, PA, of Beaufort; James
Andrew Yoho, of Carlock Copeland & Stair, LLP, of
Charleston; and Andrew F. Lindemann, of Lindemann,
Davis & Hughes, PA, of Columbia, for Respondent.

PER CURIAM: Gregory L. Martin, Michael J. Frey, and Mark K. Quinn
(collectively, Appellants) appeal the circuit court's order granting summary
judgment to The Callawassie Island Members Club, Inc. We affirm.

INTRODUCTION

Appellants originally filed a motion to consolidate their appeals with Callawassie
Island Members Club, Inc. v. Ronnie Dennis. However, this court denied the
motion, proceeded with the appeal in Dennis, and filed an opinion reversing the
grant of summary judgment to the Club and remanding the case to the circuit court.
See Callawassie Island Members Club, Inc. v. Dennis, 417 S.C. 610, 790 S.E.2d
435 (Ct. App. 2016).

Following the filing of the Dennis opinion, this court filed three unpublished
opinions in the Martin, Frey, and Quinn appeals wherein we relied on our findings
in Dennis and affirmed in part, reversed in part, and remanded to the circuit court.
See Callawassie Island Members Club, Inc. v. Martin, No. 2015-000001, 2018 WL
2059555 (S.C. Ct. App. May 2, 2018); Callawassie Island Members Club, Inc. v.
Frey, No. 2015-000002, 2018 WL 2059557 (S.C. Ct. App. May 2, 2018);
Callawassie Island Members Club, Inc. v. Quinn, No. 2015-000003, 2018 WL
2059558 (S.C. Ct. App. May 2, 2018).

After granting certiorari in Dennis, the supreme court reversed this court, reinstated
summary judgment, and remanded for us to address the Dennises' remaining issues
on appeal. See Callawassie Island Members Club, Inc. v. Dennis, 425 S.C. 193,
821 S.E.2d 667 (2018). Thereafter, Frey, Martin, and Quinn filed petitions for
rehearing asking this court to reconsider our opinions in their cases in light of the
supreme court's holding in Dennis. These three cases are now consolidated under
the caption and case number reflected above.

FACTS

Frey and his wife, Grace I. Frey (collectively, the Freys); Quinn and his wife,
Sherry B. Quinn (collectively, the Quinns); and Martin and his wife, Rebecca L.
Martin (collectively, the Martins) applied for and became members of what was
then the Callawassie Island Club, Inc. (the Island Club), a private social club on
Callawassie Island that owned and operated various recreational amenities,
including swimming pools, tennis facilities, a golf course, clubhouses, and dining
facilities, in September 1995, July 1997, and February 2001, respectively.
Appellants and their wives also purchased real property on Callawassie Island.

The application for membership Appellants and their wives executed noted
membership in the Island Club was governed by the 1994 Plan for the Offering of
Memberships (1994 Plan). The application for membership also stated the
governing documents, which included bylaws and general club rules (Rules),
might "be amended from time to time."

In 2001, after the Quinns, the Martins, and the Freys each purchased property on
Callawassie Island, the Island Club transferred its assets to The Callawassie Island
Members Club, Inc. (the Club), a member owned and managed organization. In
conjunction with the purchase, the Club issued an amended Plan and established its
own Rules and bylaws. These governing documents were also revised in 2007,
2008, 2009, 2012, 2013, and 2014.

Quinn, Frey, and Martin ceased paying dues in 2009, 2009, and 2012, respectively,
and they did not sell or transfer their memberships to new members. In September
2012, the Club filed complaints against Appellants and their wives, seeking to
collect delinquent dues, fees, and assessments and alleging claims of breach of
contract and quantum meruit. The Club alleged Appellants and their wives, as
Club members, had "continuing contractual obligations" to pay dues, fees, and
assessments. Appellants and their wives answered, alleging their resignations or
expulsions from the Club relieved them of any further liability for dues even if
their memberships had not been transferred to new members. They contended the
Club claimed Appellants remained liable for dues despite the terms of the
governing documents and despite the fact that other members had been allowed to
resign without an ongoing obligation to the Club. They also raised counterclaims,
alleging breach of contract, violations of sections 33-31-620 through -621 of the
South Carolina Code (2006), misrepresentation, and breach of fiduciary duty.

The Club subsequently moved for summary judgment, seeking judgment in its
favor on all of its claims and Appellants' counterclaims. The Club argued
Appellants' obligation to pay dues until their memberships were reissued to new
members was clear and the various defenses and counterclaims raised by
Appellants were unsupported by any evidence. The Club also attached to its
motion for summary judgment copies of the governing documents that had been
revised in 2013 and 2014.

Appellants filed a motion opposing the Club's motion for summary judgment.
Martin, Frey, and Quinn each attached an affidavit to the motion in which they
stated "the Plan for [the] Offering of Membership[s] and Club Rules did NOT
obligate members to continue to pay dues, fees and assessments and other charges
after 4 months of delinquency (at which point they were required to be expelled)"
and "[t]he Plan [for the] Offering of Membership[s] . . . restricted a member[']s
liability for dues and fees to the Club . . . to the amount of equity that membership
had in the Club." They further contended they never voted to change the
requirement that a member must be expelled after four months of suspension.

While the Club's motion for summary judgment was pending, Appellants filed a
motion to compel discovery, arguing the Club failed to fully respond to their
discovery requests. After holding a hearing, the circuit court granted Appellants'
motion on June 5, 2014.

The circuit court held a hearing on the Club's motion for summary judgment in
May 2014. During the hearing, the Club argued there was no provision in the
governing documents that relieved Appellants of their obligation to pay dues, fees,
and assessments. According to the Club, even if Appellants resigned or were
expelled, they were obligated to continue making payments. The Club further
noted the language governing the Club's expulsion of members for nonpayment
was amended and now stated that a member "may" be expelled rather than "shall"
be expelled. The Club contended subsection (b) of the South Carolina Nonprofit
Corporation Act of 1994 (the Nonprofit Corporation Act) did not prohibit
continuing obligations after resignation if the obligations were incurred or made
before resignation. The Club argued Appellants could resign their memberships by
selling their properties with their memberships.

Regarding Appellants' counterclaims, the Club contended it was entitled to
summary judgment on Appellants' negligent misrepresentation claims because
Appellants purchased their memberships from the Island Club, not the Club, and
the transactions were at arm's length and, thus, there was no justifiable reliance.
The Club further argued it was entitled to summary judgment on Appellants'
breach of contract and accounting claims because Appellants had not introduced
any evidence to support their claims that their dues, fees, and assessments had been
improperly handled by the Club.

Appellants moved during the summary judgment hearing to remove their wives
from the action because only Appellants had applied to be members of the Club.
According to Appellants, they had entered into a contract with the Island Club, not
the Club. Appellants contended the language in the governing documents
regarding expulsions was improperly changed from "shall" to "may." Appellants
argued they had a reasonable basis to believe they would be expelled after four
months of nonpayment and nothing in the governing documents indicated they
would have to continue to pay dues, fees, and assessments until their memberships
were reissued. According to Appellants, there was more than a mere scintilla of
evidence to withstand the Club's summary judgment motion, including the fact that
the Club had expelled members in the past and allowed people to concede their
memberships and the fact that the governing documents stated the Club would
have a lien against the membership for unpaid dues and fees at the time of
resignation. Appellants contended the term "unpaid" in the governing documents
did not mean a continuing obligation but referred to the amount of unpaid dues and
fees at the time of resignation. Appellants argued the governing documents
implied that a member's obligation would be limited by the amount of equity the
member had in the Club.

In a June 24, 2014 order, the circuit court granted the Club's motion as to
Appellants; however, it denied the Club's motion as to their wives pending the
completion of additional discovery. In the order, the circuit court stated, "It is clear
under all of the relevant documents, from the time [Appellants] initially acquired
[their] membership[s] until the present, that the obligation to remain a member in
good standing and pay dues, fees, assessments and other charges continues until
the membership is re-issued to a new member." The court found the governing
documents left "no room for contrary interpretation" and cited to various excerpts
from the governing documents, including the 1994 Plan, bylaws, and Rules; the
2013 Plan; and the 2014 Rules. Although the court cited to amended versions of
the governing documents, it stated that because "the obligation to pay dues, fees
and assessments until [their] membership[s] were re-issued was evident in the 1994
Plan, . . . [Appellants'] contention that [the Club] may have later failed to properly
notice and/or meet the voting requirements for subsequent amendments is
irrelevant." According to the circuit court, the Nonprofit Corporation Act
"specifically obligates a resigning member to meet any obligations incurred or
commitments made before the resignation" and "specifically recognizes a
corporation's right to impose obligations on its members beyond termination of the
membership." The court further found additional discovery was unnecessary
because Appellants "failed to demonstrate the likelihood that further discovery
[would] uncover additional relevant evidence" in light of the fact that the
governing documents were unambiguous and extrinsic evidence would not be
admissible to determine the intent of the parties.

Regarding Appellants' counterclaims, the circuit court determined the Club neither
owned nor controlled the Club's assets at the time Appellants purchased their
memberships; therefore, they could not establish the necessary elements for their
negligent misrepresentation claims. It also found Appellants had failed to
demonstrate any right to an accounting by the Club. Finally, the circuit court
awarded attorney's fees to the Club.

Appellants filed motions to reconsider. The circuit court subsequently denied
Appellants' motions to reconsider and affirmed summary judgment in favor of the
Club. On appeal to this court, Appellants argue the circuit court erred in (1) failing
to apply the "scintilla of evidence" standard to the Club's motion for summary
judgment, (2) disregarding the voluminous evidence they presented in opposing the
Club's motion for summary judgment, (3) awarding damages under incorrect
contract provisions and under incorrect interpretations of the applicable
documents, (4) granting summary judgment in favor of the Club on their
counterclaims when they submitted evidence raising numerous issues of material
fact, and (5) granting summary judgment prematurely because they did not have a
full and fair opportunity to complete discovery.

STANDARD OF REVIEW
When reviewing the grant of a summary judgment motion, the appellate court
applies the same standard that governs the circuit court under Rule 56(c), SCRCP,
which provides that 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.
Rule 56(c), SCRCP; Fleming v. Rose, 350 S.C. 488, 493, 567 S.E.2d 857, 860
(2002). In determining whether a genuine issue of material fact exists, the
evidence and all reasonable inferences drawn from it must be viewed in the light
most favorable to the nonmoving party. Sauner v. Pub. Serv. Auth. of S.C., 354
S.C. 397, 404, 581 S.E.2d 161, 165 (2003). To withstand a motion for summary
judgment in cases applying the preponderance of the evidence burden of proof, the
nonmoving party is only required to submit a mere scintilla of evidence. Hancock
v. Mid-South Mgmt. Co., 381 S.C. 326, 330, 673 S.E.2d 801, 803 (2009).

LAW/ANALYSIS

I. Disregarding Evidence

Appellants argue the circuit court disregarded genuine issues of material fact, and,
therefore, erred in granting summary judgment in favor of the Club.

A. Contract

Appellants first contend the Club failed to prove a contract existed because they
applied for membership in a different organization, the Island Club. We hold a
question of fact does not exist as to whether Appellants were members of the Club.
The evidence in the record supports the circuit court's finding that Appellants'
memberships in the Island Club transferred to the Club upon the sale of the club.
The 1994 Plan expressly contemplated the transfer of the Island Club's assets to the
members, which occurred in 2001 when the Club assumed control. Appellants
also continued paying dues and receiving the benefits of membership well after the
Club took control of the club.

B. Governing Documents

Appellants contend the circuit court disregarded (1) the differences among
resigned, terminated, and expelled members; (2) the abundant evidence that they
had been expelled by the Club, which included testimony from the Club's
representatives and other club members regarding the expulsion process and
documents showing the Club had previously expelled other members; (3) evidence
that the governing documents had been improperly changed by the Club to prohibit
people from exiting the Club; and (4) the abundant evidence that they had no
obligation beyond their equity interests in their club memberships.

1. Resignation

Appellants contend there are genuine disputes as to (1) which governing
documents are controlling and (2) the interpretation and application of the
governing documents as they relate to their obligations to pay dues.

In Dennis, this court reversed the grant of summary judgment to the Club after
determining the governing documents were ambiguous regarding whether club
members are liable for dues accruing after resignation. 417 S.C. 610, 616–17, 790
S.E.2d 435, 438 (Ct. App. 2016). This court noted the 1994 Rules provided that a
member could terminate membership in the Club by delivering written notice of
termination to the Club's secretary but would remain liable for any unpaid club
account, membership dues and charges. Id. at 616, 790 S.E.2d at 438. However,
this court found this language different from that in other documents. Id. at 616–
17, 790 S.E.2d at 438.

Subsequently, the supreme court reversed this court and found the governing
documents were unambiguous. Dennis, 425 S.C. at 200, 821 S.E.2d at 670.
Citing section 5.11 of the 2008 Plan, the court held the Club's governing
documents unambiguously provide that club members are obligated to continue to
pay all membership dues, fees, and other charges after resignation until their
membership is reissued.

Because the governing documents at issue in Dennis are the same documents at
issue in the instant cases, we affirm the grant of summary judgment to the Club on
its claims against Appellants.

2. Expulsion

Appellants also contend their liability for unpaid dues ended after four months of
delinquency by the mandatory process of expulsion.

In Dennis, this court, relying on the 2001 Rules, found there was "an ambiguity as
to whether Appellants were entitled to expulsion and thus exposed to a maximum
liability of four months' of unpaid dues (plus any accrued expenses)." Dennis, 417
S.C. at 617–18, 790 S.E.2d at 439. The 2001 Rules provide the following:
Any member whose account is delinquent for sixty (60)
days from the statement date may be suspended by the
Board of Directors. . . . Any member whose account is
not settled within the four (4) months' period following
suspension shall be expelled from the Club.

(emphasis added). This court also considered the testimony of the membership
coordinator for the Island Club and the Club, Ellen Padgett, who stated that she
understood the above provision to mean that after four months of delinquency, a
member would lose his or her membership. Id.

Like in Dennis, the record in the instant cases also contains the testimony of
Padgett that she understood the Rules to mean that if a member did not settle his
account in four months, he would lose his membership. There is also evidence
Appellants had been suspended by the Club before the initiation of the Club's
action against them and thus, should have been expelled under the 2001 Rules.
The record contains a November 2011 list of suspended members that includes
both Frey and Quinn. Additionally, the Club's General Manager, Jeff Spencer,
stated in an affidavit that the Club had "been forced, owing to non-payment, to
suspend" the membership rights and privileges of the Martins, the Freys, and the
Quinns. However, the above provision from the 2001 Rules was amended in 2007
and the mandatory expulsion language was removed. It now reads as follows:

Any member whose account is delinquent for sixty (60)
days from the statement date may be suspended by the
Board of Directors. . . . Any member whose account is
not settled within the four (4) month period following
suspension may be expelled from the Club.1

(emphasis added).

Pursuant to this revision, the Club would not have been obligated to expel
Appellants despite their suspensions. However, Appellants contend the governing
documents were improperly changed by the Club to prohibit people from exiting
the Club. They point to the following provision, which prohibits modification of
the governing document unless a majority of the members votes in favor of it:

2007 Plan:

1
An identical provision was included in the 2009 Rules.
The Board of Directors may, in its sole discretion, amend
or modify this Plan from time to time, so long as such
amendments or modifications do not materially and
adversely affect the rights of the Equity Members. Any
amendment or modification which materially and
adversely affects the rights of the Equity Members must
be approved by a majority of the votes held by the Equity
Members so affected.

Frey, Quinn, and Martin each stated in an affidavit that they never voted to change
the requirement that a member must be expelled after four months of suspension
and stated they were not aware of any vote to do so.

We disagree with Appellants' assertion that the governing documents were
improperly changed. The Appellants rely on language in the Plan rather than the
amendment provision in the Rules. According to the 2007 and 2009 Rules,

[t]he Board of Directors reserves the right to amend or
modify these rules when necessary and will notify the
membership of such changes. Any such amendments or
modifications shall be subject to and controlled by the
applicable provisions of the By-Laws and the Plan for the
Offering of Memberships.

The Rules do not contain any provisions requiring a vote of the full membership to
amend. Thus, the evidence does not raise a genuine issue of material fact
regarding whether the governing documents were properly changed and whether
the mandatory expulsion provision was still in effect at the time of Appellants'
suspensions from the Club.

C. Nonprofit Corporation Act

According to Appellants, permitting the Club to continue to levy dues, fees,
assessments, and other charges against Appellants is a violation of the Nonprofit
Corporation Act because it eliminates a person's right to resign from a nonprofit
organization; it also conflicts with the governing documents, which do not state a
member is responsible for dues and other charges after termination or expulsion.
Appellants argue the Club "cannot expel someone, bar them from all Club
facilities, keep their equity contribution—and still demand that they pay dues, fees,
assessments, and other charges for years to come."

Section 33-31-620 of the Act states that "[a] member may resign at any time" and
"[t]he resignation of a member does not relieve the member from any obligations
the member may have to the corporation as a result of obligations incurred or
commitments made before the resignation." S.C. Code Ann. § 33-31-620 (2006).

In Dennis, this court addressed whether a member could be liable for continuing
obligations post-resignation under the Act. 417 S.C. at 618, 790 S.E.2d at 439. We
stated,

Section 33-31-620 obligates resigned members to pay
any dues incurred before resignation. This section does
not require resigned members to continue to pay any dues
that accrue after resignation. To do so, we believe,
would create an unreasonable situation in which clubs
could refuse to allow a member to ever terminate [his or
her] membership obligations.

Id. This court further found "section 33-31-620 protects club members from such
continuing liability after resignation." Id. at 619, 790 S.E.2d at 439.

The supreme court found this court's reasoning ignored subsection 33-31-620(b),
which contemplates two categories of debt for which a resigned member continues
to be responsible after resignation: (1) "obligations incurred . . . before resignation"
and (2) "commitments made before resignation." Dennis, 425 S.C. at 205, 821
S.E.2d at 673 (quoting S.C. Code Ann. § 33-31-620(b)(2006)). The supreme court
held,

[t]he dues, fees, and other charges the Dennises owe fall
into the "commitments made" category. The 1994
Plan—which was in effect when the Dennises joined—
and the 2008 Plan—which was in effect when the
Dennises resigned—both provide that a member who
resigns from the Club must continue to pay membership
dues, fees, and other charges "until his or her equity
membership is reissued by the Club." When the
Dennises joined the club, they made a commitment to
continue to pay dues, fees, and other charges during the
period of time after resignation and before reissuance of
the membership. Therefore, we find the requirement that
members continue to pay dues, fees, and other charges
after resignation until their membership is reissued is not
prohibited by section 33-31-620.

Id. at 205–06, 821 S.E.2d at 673 (emphasis added).

In light of the supreme court's holding in Dennis, we have no choice but to hold the
requirement that members continue to pay dues, fees, and other charges after
resignation until their membership is reissued is not prohibited by the Act.

II. Damages/Attorney's Fees

Appellants argue the circuit court erred in awarding damages to the Club because
the awards were based on the erroneous conclusion that Appellants were obligated,
on an ongoing basis, to continue to pay all dues and charges until their
memberships were reissued. Appellants contend that based on the governing
documents, their damages should be capped at forfeiture of their equity
contributions. Finally, Appellants contend the circuit court erred in awarding
attorney's fees to the Club because the governing documents only allow for the
recovery of attorney's fees if the Club elects to foreclose its lien on the
membership, not if it sues for a money judgment.

A. Damages

The circuit court found the Martins owed $33,300.11 in unpaid dues, fees, and
other charges including interest. Additionally, the court found the Freys owed
$58,744.23 and the Quinns owed $66,658.09.

In Dennis, the supreme court found club members are obligated to continue to pay
dues, fees, and other charges after resignation until their memberships are reissued.
The opinion also contains a dialogue between the majority and the dissent
regarding the repercussions of the court's decision on the liability of club members.
In the dissent, Justice Hearn expresses concern that the majority's opinion could
lead to perpetual liability on the part of club members. The majority limited its
holding by stating it was "not deciding whether the governing documents could
support perpetual liability . . . ." Dennis at 202, 821 S.E.2d at 627.
We do not believe the language of the governing documents creates a cap on a
resigned member's liability for unpaid dues and fees. Pursuant to the 2008 Plan,

An Equity Member who is on the waiting list to sell
his/her membership will be obligated to continue to pay
the Club all dues, fees and other Charges associated with
his/her membership until his/her Equity Membership is
reissued by the Club. Any unpaid dues, fees and other
Charges plus interest accrued under the then prevailing
terms of the General Club Rules will be deducted from
the amount to be paid to the resigned member upon the
reissuance of her/her resigned Equity Membership.

(emphasis added). While this provision provides unpaid dues will be deducted
from the amount paid for the equity membership, it does not provide that the
maximum damages the Club can recover is capped at the amount paid for the
membership. Furthermore, the governing documents do not contain any provisions
that preclude the Club from collecting by other means the amounts in excess of the
value of the equity membership. Accordingly, we find the circuit court did not err
in awarding the Club damages.2

B. Attorney's Fees

The circuit court ordered the Martins to pay $8,630.13 in attorney's fees. In
addition, the court ordered the Freys to pay $9,132.23 and the Quinns to pay
$10,186.98 in attorney's fees.

2
The governing documents neither authorize nor preclude the collection of dues
and fees above the amount paid for an equity club membership. This apparent
ambiguity, if read to authorize the collection of dues, could require club members
to pay dues in perpetuity. The supreme court, however, specifically stated it was
not ruling on the issue of perpetuity. Yet, the supreme court determined the
membership documents unambiguously require the Dennises to continue to pay
dues until their membership is reissued. Based on testimony presented by both
sides, it appears the reissuance of the membership will almost assuredly never
happen. As noted, the supreme court declined to call this obligation without a
foreseeable end a "perpetual liability." Regardless of what term is used, it appears
this is an obligation which could last forever.
Appellants contend the circuit court erred in awarding attorney's fees to the Club
because the governing documents only allow for the recovery of attorney's fees if
the Club elects to foreclose its lien on the membership, not if it sues for a money
judgment.

We find this argument is unpreserved. Prior to the circuit court's grant of summary
judgment to the Club, Appellants only questioned the timeliness and
reasonableness of the attorney's fees affidavits. Appellants challenged the Club's
contractual authority to collect attorney's fees at the hearing on Appellants' motions
to reconsider; however, an issue may not be raised for the first time in a motion to
reconsider. See Kiawah Prop. Owners Grp. v. Pub. Serv. Comm'n of S.C., 359
S.C. 105, 113, 597 S.E.2d 145, 149 (2004) (holding a party may not raise an issue
in a motion to reconsider, alter, or amend a judgment that could have been
presented prior to the judgment).

III. Counterclaims

A. Breach of Contract

We affirm the circuit court's grant of summary judgment to the Club on Appellants'
breach of contract counterclaims. Our decision is based on the interrelated nature
between Appellants' breach of contract counterclaims and the Club's breach of
contract claim and, as stated above, the fact that our supreme court found the
relevant provisions of the governing documents are unambiguous.

B. Negligent Misrepresentation

We affirm the circuit court's grant of summary judgment to the Club on Appellants'
negligent misrepresentation claims.

To establish liability for negligent misrepresentation, the
plaintiff must show (1) the defendant made a false
representation to the plaintiff; (2) the defendant had a
pecuniary interest in making the representation; (3) the
defendant owed a duty of care to see that he
communicated truthful information to the plaintiff; (4)
the defendant breached that duty by failing to exercise
due care; (5) the plaintiff justifiably relied on the
representation; and (6) the plaintiff suffered a pecuniary
loss as the proximate result of his reliance upon the
representation.

Sauner v. Pub. Serv. Auth. of S.C., 354 S.C. 397, 407, 581 S.E.2d 161, 166 (2003)
(quotations omitted).

Appellants state in their briefs that they "do not maintain that the prior entity, [the
Island Club], by and through its governing documents, conveyed these false
representations." Instead, they argue "[t]he false representations occurred after the
Club took over in 2001" and consisted of the Club providing "methods for certain
members to exit the Club without owing more than their equity contribution." We
find such acts by the Club are not sufficient to support these counterclaims because
allowing certain members to leave the Club is not a false representation and it was
not a representation that was made to Appellants. See id. (stating that to establish a
claim for negligent misrepresentation, the plaintiff must show "the defendant made
a false representation to the plaintiff) (emphases added)). Accordingly, we find
Appellants failed to provide sufficient evidence to support their claims, and the
circuit court did not err in granting summary judgment to the Club on these
counterclaims. See Rule 56(c), SCRCP (stating summary judgment is proper when
"there is no genuine issue as to any material fact and. . . the moving party is
entitled to a judgment as a matter of law").

C. Quinn's and Frey's Section 33-31-621(d) Issue

Quinn and Frey argue the circuit court erred in dismissing their statutory violation
claims because the Club brought its breach of contract action after the one-year
statute of limitations of section 33-31-621(d) of the South Carolina Code (2006).
That section states, "A proceeding challenging an expulsion, suspension, or
termination, including a proceeding in which defective notice is alleged, must be
commenced within one year after the effective date of the expulsion, suspension, or
termination." Id

To the extent Quinn and Frey are contending this is a separate counterclaim, we
find this issue is unpreserved. See Elam v. S.C. Dep't of Transp., 361 S.C. 9, 23,
602 S.E.2d 772, 779–80 (2004) ("Issues and arguments are preserved for appellate
review only when they are raised to and ruled on by the lower court."). The circuit
court did not address this issue in its order granting summary judgment to the Club,
and Quinn and Frey did not raise it in their motions to reconsider. Accordingly, we
affirm the circuit court's ruling on this issue.
IV. Discovery

Appellants argue the circuit court erred in granting summary judgment before they
had a full and fair opportunity to complete discovery. We find the circuit court
acted within its discretion in granting summary judgment in light of the discovery
issues raised by Appellants. As noted by the Club, the litigation was ongoing for
two years and the circuit court found the contract was unambiguous, a ruling which
was affirmed by the supreme court in Dennis.

V. Remaining Issues

The Club raises several additional sustaining grounds, which we decline to address.
See I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 420, 526 S.E.2d 716, 723
(2000) ("It is within the appellate court's discretion whether to address any
additional sustaining grounds.").

CONCLUSION

We affirm the circuit court's grant of summary judgment to the Club.

AFFIRMED.

LOCKEMY, C.J., and SHORT and MCDONALD, JJ., concur.