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This page is a compilation of recent developments in our firm’s Practice Areas. Updates are presented chronologically below. To sort by Practice Area, select a Practice Area from the menu at left.

Auto Owners Ins. Co. v. Rollison, 378 S.C. 600, 663 S.E.2d 484 (2008).
Opinion No. 26512, decided June 30, 2008.
Practice Areas: Insurance Coverage

A passenger was injured when the vehicle in which he was riding was involved in an accident. The driver of the vehicle was the passenger’s friend, who drove the car off a sales lot owned by his grandfather. The vehicle’s insurer filed this declaratory judgment action, seeking an order finding that the uninsured motorist (UM) policy on the vehicle provided no coverage for the passenger’s damages because the passenger was not a permissive user of the vehicle or a resident of the owner’s home. The circuit court held that the passenger was not entitled to coverage because he did not have the owner’s permission to ride in the vehicle, and therefore he could not be a “guest” within the meaning of S.C. Code Ann. § 38-77-30(7). However, the South Carolina Supreme Court, extending its holding in Unisun Ins. Co. v. Schmidt, 339 S.C. 362, 529 S.E.2d 280 (2000), reversed. The court held that a person need not have the express or implied consent of the named insured in order to qualify as a “guest” under section 38-77-30(7). The person need only have the invitation of the driver unless he or she has knowledge of the named insured’s lack of consent. Thus, because the passenger in this case was invited to ride in the vehicle by the driver and there was no evidence that he had reason to know that the driver was not a permissive user of the vehicle, the passenger was a “guest” and therefore an “insured” for the purposes of UM coverage.

SCANA Corp. v. S.C. Dep’t of Revenue, 2008 WL 2572595 (S.C. 2008).
Opinion No. 26511, decided June 30, 2008.
Practice Areas: Taxation

A corporate taxpayer and the South Carolina Department of Revenue disputed the effective date language of a 1997 amendment to S.C. Code Ann. § 12-14-60, which governs the economic impact zone investment tax credit. The South Carolina Supreme Court found that the effective date language of the amendment was ambiguous, and therefore resorted to the rules of statutory construction. Thus, because any ambiguity is resolved against the taxpayer in cases involving a tax deduction or, as in this case, a tax credit, the court found in favor of the Department of Revenue.

American Credit of Sumter, Inc. v. Nationwide Mut. Ins. Co., 378 S.C. 623, 663 S.E.2d 492 (2008).
Opinion No. 26509, decided June 30, 2008.
Practice Areas: Insurance Coverage

A vehicle was involved in an accident and its owner received payment from the at-fault driver’s insurance company in an amount sufficient to repair the damages to the vehicle. However, the owner failed to repair the vehicle and later defaulted on her loan. The lender repossessed the vehicle and filed a claim with the owner’s insurer for the amount of the damages to the vehicle, less the deductible. The magistrate granted a directed verdict to the insurer, finding that the owner had effectively “converted” the damaged portion of the vehicle by retaining the funds paid to her by the at-fault driver’s insurance company rather than using them to repair the vehicle. Therefore, the magistrate found that the Loss Payable Clause of the owner’s insurance policy was inapplicable pursuant to its conversion exclusion. The circuit court affirmed the magistrate’s order, but the South Carolina Supreme Court reversed. Applying the general rule of insurance contract construction that policies should be construed in favor of coverage, the court held that the owner’s failure to utilize the insurance proceeds to repair the vehicle was not a conversion. Therefore, the conversion exclusion of the Loss Payable Clause did not apply.

McLaughlin v. Williams, 379 S.C. 451, 665 S.E.2d 667 (Ct. App. 2008).
Opinion No. 4421, decided June 30, 2008.
Practice Areas: Real Estate

A buyer purchased a home and subsequently learned of defects in the home due to prior water intrusion. The buyer filed this action against the seller and both realtors in the sale, alleging claims of fraud and negligent misrepresentation based on the seller’s non-disclosure of the defects in their disclosure statement. The trial court granted summary judgment to all defendants, and the South Carolina Court of Appeals affirmed. The court found that the buyer could not prove the elements of either fraud or negligent misrepresentation because he had no right to rely upon the alleged misrepresentation or fraud in light of the information available to him prior to closing. The available information included a home inspection report and a CL-100 termite and moisture inspection report, both of which showed the existence of water damage to the home.

Davis v. FEC, 128 S.Ct. 2759 (2008).
Docket No. 07-320, decided June 26, 2008.
Practice Areas: Election Law

A self-financed candidate for the U.S. House of Representatives challenged the constitutionality of § 319(a) of the McCain-Feingold Bipartisan Campaign Reform Act, more commonly known as the “Millionaire’s Amendment.” Section 319(a) relaxed the generally applicable limits on contributions to candidates whose opposition self-financed over $350,000 of his or her campaign. The United States Supreme Court held that the imposition of different contribution limits for candidates competing against each other impermissibly burdens the right of candidates to spend their own money for campaign speech. The imposition of a penalty on any candidate who robustly exercises that right by requiring him or her to choose between the right to engage in political speech and subjection to discriminatory fundraising limitations was not justified by any compelling interest, including the interest in leveling electoral opportunities for candidates of different personal wealth.

Exxon Shipping Co. v. Baker, 128 S.Ct. 2605 (2008).
Docket No. 07-219, decided June 25, 2008.
Practice Areas: Litigation

Numerous plaintiffs brought an action against Exxon for damages arising out of the oil spill caused by grounding of the supertanker Exxon Valdez in 1989. A jury awarded compensatory damages of $507.5 million and punitive damages of $5 billion. The United States Court of Appeals for the Ninth Circuit reduced the punitive damages award to $2.5 billion, but the United States Supreme Court reduced the award even further. The Court held that under maritime common law, punitive damages should be limited to an amount equal to compensatory damages, thus establishing a maximum punitive damages ratio of 1:1 in maritime cases.

Tidewater Finance Co. v. Kenney, 531 F.3d 312 (4th Cir. 2008).
Docket No. 07-1664, decided June 25, 2008.
Practice Areas: Bankruptcy

A debtor financed the purchase of a vehicle and gave the finance company a purchase money security interest in the vehicle to secure the debt. A few months later, the debtor filed bankruptcy. The finance company repossessed the vehicle and filed a proof of claim listing an unsecured debt representing the portion of the total debt not covered by the sale of the vehicle. The Bankruptcy Court held that the “hanging paragraph” in 11 U.S.C. § 1325(a), added by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, prevents “910 creditors” such as the finance company from asserting an unsecured deficiency claim for any portion of the debt not covered by the sale of the vehicle. However, the United States Court of Appeals for the Fourth Circuit vacated the Bankruptcy Court’s order, holding that because the Bankruptcy Code is silent on the issue, once a “910 vehicle” is surrendered by the debtor, the parties are left to their contractual rights and obligations pursuant to the principle that state law determines the rights and obligations of the parties when the Bankruptcy Code fails to supply a federal rule. Thus, the finance company was entitled to pursue an unsecured deficiency claim under state law.

Melton v. Olenik, 379 S.C. 45, 664 S.E.2d 487 (Ct. App. 2008).
Opinion No. 4418, decided June 20, 2008.
Practice Areas: Litigation

The defendant failed to answer the complaint served by the plaintiff, and the plaintiff sought a default judgment against the defendant. The defendant subsequently moved to set aside the default for good cause, inadvertence, and excusable neglect. At the hearing on the defendant’s motion, the plaintiff brought an interpreter because both the plaintiff and defendant were Korean and not proficient in English. The defendant objected to the use of that particular interpreter and requested that the court appoint a court certified interpreter, but the trial judge decided instead to commence the hearing without an interpreter and ultimately entered a default judgment against the defendant. On appeal, the South Carolina Court of Appeals found that the trial judge’s refusal to appoint a qualified interpreter—or to alternatively make specific findings that waiver of the use of a qualified interpreter was in the best interest of the parties and of justice—was reversible error. Thus, the court remanded for a new hearing with a qualified interpreter or for the trial judge to make the necessary findings of waiver.

Power Products and Services Co. v. Kozma, 379 S.C. 423, 665 S.E.2d 660 (Ct. App. 2008).
Opinion No. 4417, decided June 20, 2008.
Practice Areas: Litigation

A Virginia corporation whose principal place of business is in South Carolina filed this action against multiple defendants, most of whom were former employees of the corporation, alleging multiple causes of action arising out of the defendants’ alleged misappropriation of trade secrets from the corporation. The defendants, all residents of Virginia, moved to dismiss for lack of personal jurisdiction, but the corporation argued that many of the alleged tortious acts took place in South Carolina and that the defendants had minimum contacts with South Carolina. The trial court granted the motion to dismiss, and on appeal, the South Carolina Court of Appeals affirmed. The court found that the corporation could not establish the “power prong” for determining whether due process minimum contacts exist because it alleged no facts supporting the conclusory allegation that the defendants misappropriated trade secrets in South Carolina. Nor could the corporation establish the “fairness prong” because the defendants were citizens and residents of Virginia, and any connections they may have had to South Carolina were insufficient to satisfy due process.

Johnson v. Beauty Unlimited Landscape Co., 379 S.C. 403, 665 S.E.2d 656 (Ct. App. 2008).
Opinion No. 4414, decided June 17, 2008.
Practice Areas: Workers' Compensation

An employee developed a traumatic cataract in his right eye after he was struck by a tree limb while working for a landscaping company. An ophthalmologist removed the cataract and implanted an artificial lens, which restored the employee’s vision to 20/30. The employee sought workers’ compensation benefits for 100% loss of the use of his right eye on the basis that he had lost all natural use of his eye, a condition which was remedied only by the implanted artificial lens, which he characterized as a “corrective lens.” However, the single commissioner and the Appellate Panel awarded benefits for only a partial loss of vision, based on the employee’s 20/30 vision without contacts or glasses. Further, the Appellate Panel specifically found that the employee’s implanted artificial lens was not a “corrective lens.” The circuit court affirmed the Appellate Panel’s order, and the South Carolina Court of Appeals also affirmed. The court agreed with the Appellate Panel that there is a significant difference between removable contacts or glasses and an implanted artificial lens. The court also rejected the employee’s argument that the term “corrective lens” should be construed broadly in favor of coverage, noting that while courts should evaluate the evidence in the light most favorable to the claimant, they may not stretch the Workers’ Compensation Act and regulations to extend benefits to a claimant who no longer suffers a disability.

Ex parte Gregory, 378 S.C. 430, 663 S.E.2d 46 (2008).
Opinion No. 26504, decided June 16, 2008.
Practice Areas: Legal Malpractice Defense

The plaintiff filed a lawsuit against her former attorney, alleging multiple causes of action, including conversion. The plaintiff believed that her former attorney had wrongly retained her settlement funds from a previous action. Seven weeks after filing the action, the plaintiff dismissed the case with prejudice. The former attorney filed a motion for sanctions and attorneys’ fees under Rule 11, SCRCP, and the South Carolina Frivolous Proceedings Sanctions Act (the “Act”). The trial court found that the plaintiff’s attorney had not conducted a reasonable investigation before filing the conversion suit and awarded the former attorney attorneys’ fees and costs incurred defending the suit and seeking sanctions. On appeal, the South Carolina Supreme Court affirmed, finding that the trial court had not abused its discretion by concluding that the conversion action was frivolous and awarding attorneys’ fees and costs. The court also rejected the plaintiff’s attorney’s argument that the Act does not permit the recovery of fees and costs incurred in seeking sanctions.

Taylor v. Sturgell, 128 S.Ct. 2161 (2008).
Docket No. 07-371, decided June 12, 2008.
Practice Areas: Litigation

An antique aircraft enthusiast requested documents from the Federal Aviation Administration (FAA) under the Freedom of Information Act (FOIA). The FAA denied his request, and the enthusiast filed an unsuccessful FOIA lawsuit to secure the documents. Shortly thereafter, the plaintiff submitted another FOIA request for the same documents to the FAA, and when the FAA did not respond, he filed this FOIA action. The district court held that the suit was barred by claim preclusion, and the United States Court of Appeals for the District of Columbia Circuit affirmed, holding that even though the plaintiff was a non-party to the earlier, unsuccessful suit, he was bound by the judgment because he was “virtually represented” by a party to the previous suit. However, the United States Supreme Court, rejecting a broad theory of “virtual representation,” held that a non-party may be bound by a previous judgment only in certain narrow circumstances, all but one of which were plainly not applicable in this case. Therefore, the Court vacated the lower court decisions and remanded for a determination of whether the remaining ground for non-party preclusion—-collusion to relitigate a previously decided claim—-was applicable.

Snavely v. AMISUB of South Carolina, Inc., 379 S.C. 386, 665 S.E.2d 222 (Ct. App. 2008).
Opinion No. 4413, decided June 12, 2008.
Practice Areas: Hospital and Medical Malpractice Defense, Personal Injury

A patient filed this action against a hospital and emergency room physician, alleging that the defendants violated patient-physician confidentiality by revealing diagnosis information to the patient’s brother and sister-in-law. The trial court granted summary judgment to both defendants, finding that the patient had voluntarily involved her brother and sister-in-law in every stage of her examinations and diagnosis, and therefore that she had tacitly consented to disclosure of her medical condition. On appeal, the South Carolina Court of Appeals affirmed, holding that the trial court had not erred in finding that the patient had consented to disclosure. Furthermore, the court rejected the patient’s arguments that the hospital was contributorily negligent, that there were factual discrepancies in the record, and that publication of her medical condition was an invasion of privacy.

Houston v. Deloach & Deloach, 378 S.C. 543, 663 S.E.2d 85 (Ct. App. 2008).
Opinion No. 4408, decided June 10, 2008.
Practice Areas: Workers' Compensation

An employee was injured when the dump truck in which he was riding as a passenger was involved in an accident. The employer denied workers’ compensation benefits on the grounds that the employee had not been authorized to permit the driver of the truck to drive the truck. The single commissioner awarded benefits, but the Appellate Panel reversed, agreeing with the employer that the driver of the truck was unauthorized and therefore the employee’s injuries did not arise out of and in the course of his employment. The circuit court affirmed the Appellate Panel’s order, and on appeal, the South Carolina Court of Appeals also affirmed. The court found that there was substantial evidence to support the Appellate Panel’s finding that the driver of the truck was unauthorized and that the employee, by permitting the unauthorized driver to drive the truck, had thereby deviated from his employment. Therefore, the employee’s injuries were not compensable.

Cole v. Raut, 378 S.C. 398, 663 S.E.2d 30 (2008).
Opinion No. 26503, decided June 9, 2008.
Practice Areas: Appellate, Litigation

The plaintiffs brought a medical negligence action against their obstetrician, alleging that the obstetrician’s negligence during the delivery of their son resulted in brain damage to and, ultimately, the death of the baby. At the close of evidence, the trial court permitted the obstetrician to amend her pleadings to assert the defense of assumption of the risk. The trial court then instructed the jury on the law of negligence and the doctrine of assumption of the risk. The jury rendered a defense verdict, but the South Carolina Court of Appeals reversed and remanded for a new trial, find that the trial court’s charge on assumption of the risk prejudiced the plaintiffs and was therefore erroneous. The South Carolina Supreme Court, however, reversed the Court of Appeals and reinstated the jury’s verdict. The court found that though the jury instruction on assumption of the risk was erroneous, it did not prejudice the plaintiffs in light of the entire jury charge, which included the general negligence instruction. Furthermore, the court found that the two-issue rule, which provides that a verdict will not be reversed where it is supported as to at least one of two or more issues or defenses, applied as an additional sustaining ground because the jury rendered a general defense verdict after hearing a properly submitted negligence claim and an erroneous charge on assumption of the risk.

Sonoco Products Co. v. S.C. Dep’t of Revenue, 378 S.C. 385, 662 S.E.2d 599 (2008).
Opinion No. 26502, decided June 9, 2008.
Practice Areas: Real Estate, Taxation

A manufacturer sought a refund of property taxes it paid on its corporate office buildings. The office buildings, which were located across a public right-of-way from the manufacturing facility, were assessed as manufacturing-related property, which is assessed at a 10.5 percent ratio rather than the 6 percent ratio used for non-manufacturing-related property. The manufacturer argued that because the office buildings were separated from the manufacturing facility by a public road, they were not “contiguous” for purposes of S.C. Code Ann. § 12-43-220, even though the manufacturer held a fee simple interest in the road. The Department of Revenue declined to issue the refund, finding that the properties were indeed “contiguous.” The Administrative Law Court upheld the department’s decision, but the circuit court reversed. However, the South Carolina Supreme Court reversed the circuit court and reinstated the Administrative Law Court’s order. The court found that the Legislature intended the term “contiguous” in S.C. Code Ann. § 12-43-220 to be construed broadly. The court also found that the grant of an easement or right-of-way does not defeat contiguity. Thus, because there were no intervening landowners between the manufacturing facility and the office buildings, the Administrative Law Court was correct in finding that the properties were “contiguous.”

Quail Hill, LLC v. County of Richland, 379 S.C. 314, 665 S.E.2d 194 (Ct. App. 2008).
Opinion No. 4407, decided June 6, 2008.
Practice Areas: Real Estate

A developer was interested in purchasing a parcel of land for development into a manufactured-home subdivision. Prior to purchasing the property, the developer’s broker met with Richland County representatives, who informed the broker that the parcel’s zoning classification permitted a manufactured-home subdivision. Nearly two years later, after the developer had begun marketing and selling lots, the county ordered the developer to stop development, saying that an error had been made and that the parcel’s zoning classification did not permit a manufactured-home subdivision. The developer sued the county, alleging equitable estoppel, negligence, negligent misrepresentation, and inverse condemnation. The trial court granted the county summary judgment on all causes of action, but the South Carolina Court of Appeals reversed as to the negligence, negligent misrepresentation, and equitable estoppel causes of action. The court found that no South Carolina precedent precluded the developer from asserting negligence or negligent misrepresentation against the county under the South Carolina Tort Claims Act, and that genuine issues of material fact existed regarding whether the county was equitably estopped from enforcing the correct zoning classification.

Swicegood v. Lott, 379 S.C. 346, 665 S.E.2d 211 (Ct. App. 2008).
Opinion No. 4405, decided June 6, 2008.
Practice Areas: Litigation, Personal Injury

A former officer brought suit against the Richland County Sheriff in his official capacity. The officer alleged multiple causes of action, but all except the abuse of process claim were dismissed on a summary judgment motion. A jury awarded the officer $150,000 and the sheriff appealed, arguing that his motions for directed verdict, judgment notwithstanding the verdict, and a new trial were wrongly denied. The South Carolina Court of Appeals affirmed, holding that: 1) the tort of abuse of process does not require a finding of actual malice or intent to harm, and therefore the sheriff was not entitled to sovereign immunity under the South Carolina Tort Claims Act; (2) the primary purpose of the sheriff’s tortious actions was to coerce or extort testimony from the officer, and therefore the sheriff was not entitled to assert the defense that the process was carried to its authorized conclusion; (3) the trial court was correct in finding that a jury question existed on the issue of proximate causation of damages; and (4) the trial court had not abused its discretion in refusing to grant a new trial.

In re Meredith, 527 F.3d 372 (4th Cir. 2008).
Docket No. 07-1509, decided June 3, 2008.
Practice Areas: Bankruptcy

A judgment was entered and involuntary bankruptcy proceedings were initiated against a professional corporation through which the debtor operated an accounting practice. Around the same time, the debtor transferred the practice to another corporate entity, of which the debtor’s wife was the president and sole shareholder. Shortly thereafter, the debtor again transferred the practice to yet another entity. The bankruptcy trustee brought an action against the debtor’s wife, arguing that the transfers of the accounting practice were made for her benefit. The bankruptcy and district courts denied recovery against the debtor’s wife, and the United States Court of Appeals for the Fourth Circuit affirmed. The court found that the debtor’s wife had merely been, for a brief period of time, the nominal owner of a business effectively controlled by her husband, a fact which did not demonstrate that she received any benefit from that ownership. Thus, the court concluded that she was not “the entity for whose benefit” the transfers were made under 11 U.S.C. § 550(a)(1).

Cobin v. Hearst-Argyle Television, Inc., 561 F.Supp.2d 546 (D.S.C. 2008).
Decided June 2, 2008.
Practice Areas: Personal Injury

The plaintiff filed a defamation action against multiple news organizations, alleging that they published defamatory articles, broadcasts, and reports concerning him. The defendants moved to dismiss the claims on the grounds that their reports were protected by the fair report privilege, which shields news organizations from defamation claims for publishing information originally based upon government reports or actions. Because the articles, broadcasts, and reports in question were substantially accurate summaries of a police report, the United States Court for the District of South Carolina granted the motion to dismiss.

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