Flint Equipment Company v. North Edisto Logging, Inc.

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

Flint Equipment Company, Respondent,

v.

North Edisto Logging, Inc. and Paul Gunter, Appellants.

Appellate Case No. 2018-001449

Appeal From Lexington County
Jocelyn Newman, Circuit Court Judge

Unpublished Opinion No. 2021-UP-282
Submitted April 1, 2021 – Filed July 21, 2021

REVERSED AND REMANDED

David Randolph Whitt, of Fleming & Whitt, PA, of West
Columbia, for Appellants.

Matthew Drew DeMott, of Moore Clarke DuVall &
Rodgers, of Savannah, Georgia, for Respondent.

PER CURIAM: In this contract dispute, North Edisto Logging, Inc. (North
Edisto) appeals the trial court's dismissal of its counterclaims pursuant to Rule
12(b)(6), SCRCP. We reverse and remand.
Flint Equipment Company (Flint) and North Edisto executed and entered into an
agreement whereby Flint agreed to provide North Edisto with goods and services
relating to North Edisto's logging business and equipment. In April 2017, North
Edisto asked Flint to repair a large piece of tree cutting equipment, and Flint made
the requested repairs. Flint sent North Edisto an invoice in the amount of
$10,483.53, but North Edisto failed to pay. Flint filed suit against North Edisto for
breach of contract in an effort to recoup payment for its services and repairs.
North Edisto filed an unverified answer and three counterclaims. The first
counterclaim was titled "Class Action, Rule 23, SCRCP," and the second and third
counterclaims were nearly identical, asserting a breach of the implied duty of good
faith and fair dealing. Flint filed a motion to dismiss North Edisto's counterclaims
pursuant to Rules 12(b) and (f), SCRCP.

On May 8, 2018, the trial court heard arguments regarding Flint's motion and later,
on July 2, 2018, issued an order dismissing North Edisto's counterclaims with
prejudice. This appeal followed.

We find the trial court erred in dismissing North Edisto's counterclaims with
prejudice without affording North Edisto an opportunity to amend its pleadings.
See Rydde v. Morris, 381 S.C. 643, 646, 675 S.E.2d 431, 433 (2009) ("On appeal
from the dismissal of a case pursuant to Rule 12(b)(6), an appellate court applies
the same standard of review as the trial court."). "When a trial court finds a
complaint fails 'to state facts sufficient to constitute a cause of action' under Rule
12(b)(6), the court should give the plaintiff an opportunity to amend the complaint
pursuant to Rule 15(a)[, SCRCP,] before filing the final order of dismissal."
Skydive Myrtle Beach, Inc. v. Horry County, 426 S.C. 175, 179, 826 S.E.2d 585,
587 (2019) (quoting Rule 12(b)(6), SCRCP); see also Foman v. Davis, 371 U.S.
178, 182 (1962) (stating when a complaint is dismissed pursuant to Rule 12(b)(6),
leave to amend should be freely given). A trial court does not have discretion to
"dismiss a complaint with prejudice for failure to state a claim under Rule 12(b)(6)
without at least considering whether to allow leave to amend under Rule 15(a)."
Skydive, 426 S.C. at 189, 826 S.E.2d at 592. Therefore, a trial court may not
"dismiss a claim with prejudice unless the plaintiff is given a meaningful chance to
amend the complaint, and after considering the amended pleading, the court is
certain there is no set of facts upon which relief can be granted." Id. "Rule 15(a)
'strongly favors amendments and the court is encouraged to freely grant leave to
amend.'" Id. at 180, 826 S.E.2d at 587 (quoting Patton v. Miller, 420 S.C. 471,
489, 804 S.E.2d 252, 261 (2017)).
Further, under Rule 203(b)(1), SCACR, the "notice of appeal shall be served on all
respondents within thirty (30) days after receipt of written notice of entry of the
order or judgment." The thirty-day notice requirement is only stayed if a Rule
59(e) motion is filed, an option only available to parties that have a "legitimate
argument the trial court erred in finding the complaint deficient." See Skydive 426
S.C. at 181, 826 S.E.2d at 588. When a party has no legitimate argument as to the
merits of a 12(b)(6) dismissal, that party has no way of tolling the thirty-day
deadline for filing an appeal while a motion to amend is litigated. Id. Therefore, a
party that chooses to replead is prevented from doing so by an order that dismisses
a claim under 12(b)(6) "with prejudice." Id.

In this case, the trial court dismissed North Edisto's counterclaims pursuant to Rule
12(b)(6) with prejudice. The record is void of evidence showing the trial court
considered allowing North Edisto to amend its pleadings before filing the final
order of dismissal. This was an error. See id. at 179, 826 S.E.2d at 587 ("When a
trial court finds a complaint fails 'to state facts sufficient to constitute a cause of
action' under Rule 12(b)(6), the court should give [a party] an opportunity to
amend [its complaint] pursuant to Rule 15(a) before filing the final order of
dismissal." (quoting Rule 12(b)(6))). Further, the trial court erred in granting
Flint's motion to dismiss "with prejudice" because it effectively precluded North
Edisto from filing and litigating a post-ruling motion to amend under Rule 15(a).
See id. at 182, 826 S.E.2d at 588 (stating a trial court erred in dismissing a claim
under 12(b)(6) "with prejudice").

Based on the foregoing, the trial court's order is reversed and remanded for further
proceedings consistent with this opinion.

REVERSED AND REMANDED.1

WILLIAMS, THOMAS, and HILL, JJ., concur.

1
We decide this case without oral argument pursuant to Rule 215, SCACR.