In re: Tony Megna v. Wilson

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

In re: Tony Megna, Respondent,

James A. Anasti, Appellant,

v.

Lance Wilson, Willis Goodwin, Gina L. Anasti Lee, and
Richland County Clerk of Court, Defendants.

Appellate Case No. 2015-002054

Appeal From Richland County
Robert E. Hood, Circuit Court Judge

Unpublished Opinion No. 2018-UP-127
Heard February 6, 2018 – Filed March 21, 2018

AFFIRMED

Desa Ballard, of Ballard & Watson, Attorneys at Law, of
West Columbia, and Douglas Neal Truslow, of Truslow
& Truslow, of Columbia, both for Appellant.

Keith M. Babcock and Ariail Elizabeth King, both of
Lewis Babcock L.L.P., of Columbia, and James Mixon
Griffin, of Griffin - Davis, of Columbia, all for
Respondent.
PER CURIAM: Appellant James A. Anasti filed this appeal challenging a circuit
court order denying his motion for sanctions against Respondent Tony Megna
under Rule 11, SCRCP. Appellant argues Respondent asserted frivolous and
disingenuous defenses in the underlying action in violation of Rule 11. We affirm.

We find Appellant failed to carry his burden of showing Respondent asserted
frivolous defenses. See Ex parte Gregory, 378 S.C. 430, 436–37, 663 S.E.2d 46,
50 (2008) (noting claims for sanctions under Rule 11 or the Frivolous Civil
Proceedings Sanction Act 1 are equitable matters); Stoney v. Stoney, Op. No. 27758
(S.C. Sup. Ct. filed Dec. 20, 2017) (Shearouse Adv. Sh. No. 48 at 51) (declaring
the standard of review in equitable matters is de novo); id. (explaining, under de
novo review, we may consider two principles long recognized by our courts "(1) a
trial [court] is in a superior position to assess witness credibility, and (2) an
appellant has the burden of showing the appellate court that the preponderance of
the evidence is against the finding of the trial [court]").

On appeal, Appellant specifically argues two of the defenses asserted by
Respondent were frivolous. See Rule 11(a), SCRCP (stating "[e]very pleading,
motion[,] or other paper of a party represented by an attorney shall be signed in his
individual name by at least one attorney of record," and the signature "constitutes a
certificate by [the attorney] that he has read the pleading, motion[,] or other paper;
that to the best of his knowledge, information[,] and belief there is good ground to
support it; and that it is not interposed for delay"); Gregory, 378 S.C. at 437, 663
S.E.2d at 50 (interpreting Rule 11(a) as allowing sanctions against a party or a
party's attorney "for filing a frivolous pleading, motion, or other paper, or for
making frivolous arguments" (citing Runyon v. Wright, 322 S.C. 15, 19, 471
S.E.2d 160, 162 (1996))).

First, Appellant claims Respondent knew his defense that Gina Lee inherited the
Property was frivolous. Appellant relies on two pieces of evidence to show
Respondent knew this argument was frivolous. Appellant points to a letter from an
attorney, Joseph Moore, expressing his opinion that Lee "did not inherit any
interest in the Property." Moore's letter, by itself, was insufficient to render
Respondent's defense to the contrary frivolous. Moore's letter amounts to a legal
opinion from another attorney. Respondent's defense, which contradicted Moore's
letter, was not rendered frivolous simply because another member of the bar
disagreed with it. Further, Moore equivocated in the letter by saying he wished "to

1
S.C. Code Ann. § 15-36-10 (Supp. 2017).
consult with another attorney" to discuss the issues. Thus, as long as Respondent
had good ground to support his defense—to the best of his knowledge,
information, and belief—he did not violate Rule 11 by asserting the defense.

Next, Appellant relies on a letter from Respondent to his client, Lee, for evidence
Respondent knew this defense was frivolous. However, we decline to consider the
letter between Respondent and Lee because the circuit court found Appellant
violated Rule 26(b)(5)(B), SCRCP, with regard to the letter. At some point after
Respondent produced the letter to Appellant, Respondent notified Appellant the
letter was subject to attorney-client privilege and requested Appellant return it.
Appellant refused, and the circuit court found Appellant failed to comply with Rule
26(b)(5)(B), which sets out the procedure for resolving such a dispute. 2 Appellant
did not appeal the circuit court's finding that he violated Rule 26(b)(5)(B). See Atl.
Coast Builders & Contractors, LLC v. Lewis, 398 S.C. 323, 329, 730 S.E.2d 282,
285 (2012) ("[A]n unappealed ruling, right or wrong, is the law of the case."). The
rule also provides the party receiving a disputed document "may not use or disclose
the information until the claim is resolved." Thus, it was improper for Appellant to
use and rely on the letter throughout this litigation, and we decline to base a
violation of Rule 11 on a letter that Appellant never should have used or disclosed.

Moreover, we find Respondent had non-frivolous grounds to support the defense
that Lee inherited the property. As part of this defense, Respondent claimed
Appellant participated in the probate proceedings and agreed to the transfer of the
property to Lee according to their father's will. At the conclusion of the probate
proceedings, Appellant signed a release that purported to "forever discharge[] the
[p]ersonal [r]epresentative(s) and the [e]state from any and all rights and claims,
which [Appellant] may have against the [p]ersonal [r]epresentative(s) and the
[e]state." Respondent also cited section 62-3-1006 of the South Carolina Code
(Supp. 2017) 3 as barring Appellant's claim. We acknowledge Lee faced what
proved to be an insurmountable argument that, despite the terms of her father's will
that purportedly devised the property to her, title actually passed to her brother
upon her father's death, as her brother and father held title as tenants in common
with right of survivorship. We find, however, the title issue was muddled by the
Dallis Law Firm's 2000 certification that Lee held legal title. We were unable to

2
Appellant attempted to mitigate his noncompliance with Rule 26(b)(5)(B) by
informing the circuit court he "got a second opinion from somebody who's skilled
in ethics about what you're supposed to do in this situation."
3
Section 62-3-1006 creates a statute of limitations of three years for claims against
distributees by persons claiming to be entitled to a distribution from an estate.
find any case law in South Carolina interpreting whether section 62-3-1006 bars
claims against distributees for property erroneously included in an estate. Also, we
were unable to find any case law in South Carolina interpreting what effect the
release signed by Appellant would have on property erroneously included in the
estate. Moreover, the opinion letter from Joseph Moore, discussed above, failed to
render any opinion on what impact the release signed by Appellant or section 62-3-
1006 may have on a title dispute. Thus, Respondent's arguments regarding section
62-3-1006 and the release were novel issues under the unique facts of this case. As
novel issues, these arguments had some merit and did not rise to the level of
frivolity. See Gregory, 378 S.C. at 437, 663 S.E.2d at 50 (interpreting Rule 11(a)
as allowing sanctions against a party's attorney "for filing a frivolous pleading,
motion, or other paper, or for making frivolous arguments"). Thus, under the
standard for Rule 11(a), sanctions were not warranted against Respondent for
asserting the defense that Lee inherited the Property with Appellant's consent and
that section 62-3-1006 barred any review of the issue.

The second defense Appellant argues was frivolous was Respondent's adverse
possession claim. We find Respondent's argument raised a novel issue and he had
a reasonable basis for asserting and pursuing the argument. Specifically,
Respondent's argument that Lee remained in continuous possession of the Property
after the sale in January 2000 due to her retaining a mortgage interest in the
Property was a novel issue in South Carolina. Because Respondent's adverse
possession defense involved a novel argument and there was a reasonable basis
underlying it, the defense did not rise to the level of frivolity. See A.L. v. Jackson
Cty. Sch. Bd., 652 Fed. Appx. 795, 797 (11th Cir. 2016) ("[T]he purpose of Rule
11 is to deter frivolous lawsuits and not to deter novel legal arguments or cases of
first impression."); Quets v. Needham, 682 S.E.2d 214, 223 (N.C. Ct. App. 2009)
("Rule 11 sanctions are inappropriate where the issue raised by a plaintiff's
complaint is one of first impression."). Although the existence of a novel legal
issue may not prohibit the imposition of Rule 11 sanctions as a matter of law, it
weighs in favor of not awarding sanctions. In this case, Megna's novel adverse
possession argument did not rise to the level of being frivolous. 4

4
In granting summary judgment against Lee, Judge Kinard did not deem Lee's
positions unfounded or meritless. Likewise, Judge Thomas W. Cooper, who
served as the arbitrator in a related proceeding, ruled while the evidence was
"irrefutable" that Lee never held title, "her actions were not willful actions in that
she had a good faith belief that she was the owner of the subject property as a
result of [her father's] will."
Finally, during oral argument, Appellant asserted the circuit court erred by
misstating the law regarding the burden of proof required to show a Rule 11
violation. Specifically, Appellant claimed he was not required to prove
Respondent's mental state to show a violation of Rule 11. We find Appellant failed
to adequately raise this issue on appeal. Appellant's brief stated simply, "[t]he
[circuit] court erred on both a factual and legal basis." The brief failed to make any
other statements or arguments regarding the specifics of how Appellant believed
the circuit court erred by requiring him to prove Respondent's mental state. The
brief also failed to cite any authority supporting this issue. See Rule 208(b)(1)(B),
SCACR ("Ordinarily, no point will be considered which is not set forth in the
statement of the issues on appeal."); Rule 208(b)(1)(D), SCACR (requiring
"discussion and citations of authority" in the appellant's brief for this Court to
consider an issue); Ellie, Inc. v. Miccichi, 358 S.C. 78, 99, 594 S.E.2d 485, 496
(Ct. App. 2004) ("Numerous cases have held that where an issue is not argued
within the body of the brief but is only a short conclusory statement, it is
abandoned on appeal."). Furthermore, Appellant could not use oral argument to
raise and argue an issue for the first time. See Bochette v. Bochette, 300 S.C. 109,
112, 386 S.E.2d 475, 477 (Ct. App. 1989) ("An appellant may not use either oral
argument or the reply brief as a vehicle to argue issues not argued in the appellant's
brief.").

Based on the foregoing, we affirm the circuit court's order because Appellant failed
to show Respondent asserted the defenses in violation of Rule 11.

AFFIRMED.

SHORT, THOMAS, and HILL, JJ., concur.