The most important opinions for the first quarter of 2017.
Medicaid – Benefits Reduction – Civil Practice – Mootness
Kobe v. Haley (Lawyers Weekly No. 006-001-17, 55 pp.) (Per Curiam) No. 15-1419; Appealed from U.S.D.C. at Columbia, S.C. (Margaret Seymour, S.J.) 4th Cir.
Holding: Even though defendants have provided the equipment plaintiff Kobe needs during the pendency of this litigation, since there is no guarantee he will continue to be provided with this equipment once the litigation is ended, his challenges to the reduction in his Medicaid benefits are not moot.
We affirm the dismissal of claims against certain individual defendants, but we vacate summary judgment for the remaining defendants. Remanded.
No Privacy Act Claims for Data Breaches
Beck v. McDonald (Lawyers Weekly No. 001-029-17, 26 pp.) (Diaz, J.) No. 15-1395(L), Feb. 6, 2017; USDC at Columbia, S.C. (Terry Wooten, C.J.) 4th Cir.
Holding: Two veterans who were treated at a Veterans Affairs Medical Center do not have standing to sue VA officials for violations of the Privacy Act of 1974 and the Administrative Procedure Act for alleged harm from the increased risk of future identity theft and cost of protective measures arising from two data breaches at the Center that compromised their personal information; the 4th Circuit affirms judgment for defendants, on an issue that has split the federal courts of appeals.
SSA Claim Remanded for ‘Special Technique’ Reg
Patterson v. Comm’r of Social Security Administration (Lawyers Weekly No. 001-013-17, 17 pp.) (Duncan, J.) No. 15-2487, Jan. 19, 2017; USDC at Charleston, S.C. (Hendricks, J.) 4th Cir.
Holding: On a matter of first impression in this circuit, the 4th Circuit holds that an administrative law judge’s failure to follow the “special technique” required while evaluating a claimant’s mental impairment may constitute harmless error; however, it was not harmless error in evaluating the claim of a woman with borderline intellectual functioning and other impairments, and her case is remanded for reconsideration.
Contract – Choice of Law – Civil Practice – Statute of Limitations/Laches – Boat Repairs
McGowan v. Pierside Boatworks, Inc. (Lawyers Weekly No. 002-067-17, 5 pp.) (Patrick Michael Duffy, J.) 2:16-cv-03529; D.S.C.
Holding: In a contract to repair plaintiff’s sailboat, one provision invoked admiralty law while another said South Carolina law would govern. In order to give effect to both choice-of-law provisions, the court concludes that the parties intended for general maritime law to be supplemented by South Carolina state law in the absence of a conflict between the two.
The court denies plaintiff’s motion to dismiss defendant’s counterclaim.
Contract – Labor & Employment – ‘Not a Contract of Employment’
Patterson v. Asbury SC Lex, L.L.C. (Lawyers Weekly No. 002-016-17, 7 pp.) (Marcy Geiger Lewis, J.) 6:16-cv-01666; D.S.C.
Holding: The parties’ agreement says it is “not a contract of employment.” Whether it is a “contract of employment” or a contract between the parties involves two distinct things. It appears defendant said the agreement was “not a contract of employment” to make clear the agreement was not meant to alter the at-will status of plaintiff’s employment. This does not invalidate the agreement’s arbitration clause.
The court grants defendant’s motion to dismiss and compel arbitration.
Civil Practice – Rule 60 Motion – No Excusable Neglect – Counsel Suspended
Belfor USA Group, Inc. v. Banks (Lawyers Weekly No. 002-040-17, 10 pp.) (David Norton, J.) 2:15-cv-01818; D.S.C.
Holding: Even though former defense counsel may have engaged in sloppy lawyering in his representation of defendants in this case, since defendants suspected his neglect but elected to keep his as their attorney (until he was suspended), the court declines to set aside a dispositive order in plaintiff’s favor.
The court denies defendants’ motion under Fed. R. Civ. P. 60(b)(6).
Motion to Disqualify – Duties to Prospective Client – Mere Consultation
Valizadeh v. Doe (Lawyers Weekly No. 002-023-17, 7 pp.) (Mary Geiger Lewis, J.) 3:16-cv-03098; D.S.C.
Holding: Plaintiff merely consulted with a lawyer to discuss the possibility of retaining her; without more, this fails to qualify plaintiff as a prospective client entitled to the protections of Rule 1.18, RPC.
The court denies plaintiff’s motion to disqualify counsel for third-party subpoena recipient Jane Gari.
Self-Representation – Necessary Witness – Indigent Services – Billing
Brooks v. South Carolina Commission on Indigent Defense (Lawyers Weekly No. 011-015-17, 12 pp.) (John Geathers, J.) Appealed from Richland County Circuit Court (D. Craig Brown, J.) S.C. App.
Holding: Although Rule of Professional Conduct 3.7 generally prohibits a lawyer from acting as advocate at a trial in which the lawyer is likely to be a necessary witness, this rule does not apply to a lawyer who is appearing pro se.
We affirm the circuit court’s disqualification of appellant’s wife from representing him, but we reverse the circuit court’s disqualification of appellant from representing himself.
Unauthorized Practice of Law – Real Property – HOA Management Firm
Rogers Townsend & Thomas, PC v. Peck (Lawyers Weekly No. 010-016-17, 7 pp.) (Per Curiam) (Costa Pleicones, Acting Justice, not participating) S.C. S. Ct.
Holding: A limited liability company that manages homeowners’ associations engaged in the unauthorized practice of law when – without the involvement of an attorney – it prepared and recorded a notice of lien and related documents; brought an action in magistrate’s court to collect the debt; after obtaining a judgment in magistrate’s court, filed the judgment in circuit court; and advertised that it could perform these services.
In an administrative order titled In re Unauthorized Practice of Law Rules Proposed by South Carolina Bar, 309 S.C. 304, 422 S.E.2d 123 (1992), we modified prior case law to “allow a business to be represented by a non-lawyer, officer, agent or employee.” We also promulgated South Carolina Magistrate Court Rule 21, which provides, “A business … may be represented in a civil magistrates court proceeding by a non-lawyer officer, agent, or employee….”
We clarify that “agent” does not include non-lawyer third party entities or individuals. Instead, as used in Unauthorized Practice of Law and Rule 21, “agent” includes individuals who are not officers or employees of a business but who have some nexus or connection to the business arising out of its corporate structure.
Checking-Account Deposits Were Not ‘Transfers’
Ivey v. First Citizens Bank & Trust Co. (Lawyers Weekly No. 001-031-17, 12 pp.) (Gregory, J.) No. 15-2209, Jan. 31, 2017; USDC at Greensboro, N.C. (Osteen, J.) 4th Cir.
Holding: A chapter 7 trustee cannot reach deposits or wire transfers debtor made into his own checking account as “fraudulent transfers,” the 4th Circuit says; when a debtor deposits or receives a wire transfer of funds into his own unrestricted checking account in the regular course of business, it is not a “transfer” under the Bankruptcy Code, and therefore cannot be a “fraudulent transfer.”
Court Vacates Company’s ‘Staggering Sanctions’
Blue Cross Blue Shield of North Carolina v. Jemsek Clinic (Lawyers Weekly No. 001-057-17, 17 pp.) (Motz, J.) No. 16-1030, March 3, 2017; USBC at Charlotte, N.C. (Conrad, J.) 4th Cir.
Holding: The 4th Circuit vacates a bankruptcy court’s “staggering sanctions” of $1.29 million in attorney’s fees and costs on creditor Blue Cross/Blue Shield of North Carolina and dismissal with prejudice of claims the creditor valued at over $10 million; although the creditor acted in bad faith, these sanctions were excessive and based on a faulty premise: that Blue Cross NC bore responsibility for debtor failing to preserve his claims.
Debtors May Use ‘Standard’ Amounts for Expenses
Lynch, Bankruptcy Adm’r v. Jackson (Lawyers Weekly No. 001-005-17, 12 pp.) (Thacker, J.) No. 16-1358, Jan. 4, 2017; USBC at Raleigh, N.C. (Humrickhouse, J.) 4th Cir.
Holding: Debtors may take the full National and Local Standard amounts for expenses in their chapter 7 bankruptcy proceeding even though their actual expenses are less than the Standard amounts; the 4th Circuit upholds a bankruptcy court’s refusal to dismiss the case as an abusive filing.
Discharge Denied for False Property Valuation
Robinson v. Worley (Lawyers Weekly No. 001-049-17, 17 pp.) (Wilkinson, J.) No. 15-2346, Feb. 28, 2017; USDC at Greensboro, N.C. (Schroeder, J.) 4th Cir.
Holding: A chapter 7 debtor who had two degrees in finance and a professional career as a financial advisor should have known that his lowball valuation of a minority interest in a real estate investment company at just four percent of his initial capital contribution was too low to be accurate; the 4th Circuit affirms a denial of a discharge in bankruptcy under the false oath provision of 11 U.S.C. § 727(a)(4).
Appeals – Interlocutory – Multiple ADA Claims – Medicaid
Stogsdill v. South Carolina Department of Health & Human Services (Lawyers Weekly No. 006-002-17, 7 pp.) (Per Curiam) No. 15-1986; Appealed from U.S.D.C. at Columbia, S.C. (Joseph Anderson Jr., S.J.) 4th Cir.
Holding: Although the district court rejected some of plaintiff Levin’s claims under the Americans with Disabilities Act, the district court did not consider or rule on plaintiffs’ request for an order prohibiting defendants from retaliating against them for exposing abuse or neglect of recipients of Medicaid waiver program benefits. Therefore, the district court’s order was not final.
Discovery – Tort/Negligence – Insurance – Bad Faith Claim – Attorneys
Graham v. National Union Fire Insurance Co. of Pittsburgh, PA (Lawyers Weekly No. 002-025-17, 9 pp.) (Margaret Seymour, S.J.) 0:16-cv-01153; D.S.C.
Holding: Where the defendant-insurer asserts as an affirmative defense that it “did not act unreasonably or in bad-faith,” defendant has implicitly waived attorney-client privilege. To the extent defendant relied on its attorneys’ investigation to determine the denials of plaintiff’s claim, defendant has waived attorney-client privilege and must provide the information defendant relied upon in making its decision to deny the claims.
Plaintiff’s motion to compel discovery is granted (except as to information already provided by defendant).
Dueling Bishops Sue for ‘False Advertising’
Right Rev. Charles G. vonRosenberg v. Right Rev. Mark J. Lawrence (Lawyers Weekly No. 001-043-17, 10 pp.) (Motz, J.) No. 15-2284, Feb. 21, 2017; USDC at Charleston, S.C. (Houck, J.) 4th Cir.
Holding: In this dispute between two clergymen, each of whom claims to be the Bishop of The Protestant Episcopal Church in the Diocese of South Carolina, the 4th Circuit vacates a district court abstention order and stay of the action pending the conclusion of state proceedings, and remands the case for a second time.
Evidence – Hearsay – Business Records Exception – Real Property – Mortgages – Banks & Banking
FV-I, Inc. v. Dolan (Lawyers Weekly No. 011-009-17, 6 pp.) (Per Curiam) Appealed from Lexington County Circuit Court (R. Keith Kelly, J.) S.C. App. Unpub.
Holding: Even though plaintiff’s witness did not work for defendants’ previous mortgage servicer, Saxon Servicing Group (Saxon), the witness could testify about defendants’ loan history with Saxon pursuant to the business records exception to the rule against hearsay.
We affirm the circuit court’s denial of defendants’ motion for a new trial.
Rooker-Feldman Doctrine – Domestic Relations – Support Order – Income Withholding Notices – Personal Jurisdiction – Venue
Strickland v. County Council of Beaufort County, SC (Lawyers Weekly No. 002-020-17, 15 pp.) (Joan Ericksen, J.) 9:17-cv-00067; D.S.C.
Holding: The Rooker-Feldman doctrine does not prevent federal courts from determining whether income withholding notices – issued after a state court dismissed the case – were valid. Nevertheless, venue is not proper in Minnesota.
The South Carolina defendants’ motion to dismiss is denied, and this case is transferred to the District of South Carolina.
Court Upholds Maryland Assault-Weapon Ban
Kolbe v. Hogan (Lawyers Weekly No. 001-050-17, 116 pp.) (King, J.) No. 14-1945, Feb. 21, 2017; USDC at Baltimore, Md. (Blake, J.) 4th Cir.
Holding: The en banc 4th Circuit upholds Maryland’s Firearm Safety Act of 2013, which bans the AR-15 and other military-style rifles, as well as shotguns and detachable large-capacity magazines.
Deaf Detainee Seeks Accommodations
Heyer v. U.S. Bureau of Prisons (Lawyers Weekly No. 001-051-17, 43 pp.) (Traxler, J.) No. 15-6826, Feb. 23, 2017; USDC at Raleigh, N.C. (Dever, J.) 4rh Cir.
Holding: A profoundly deaf plaintiff detained as a sexually dangerous person wins remand of his suit alleging the federal Bureau of Prisons violated his civil rights by failing to provide him with an American Sign Language interpreter during medical treatment and for mental health treatment and religious services, and by unreasonably denying access to TTY services or use of a videophone; the 4th Circuit vacates summary judgment for defendant prison officials.
Police Chief Immune from Officers’ Suit
Crouse v. Town of Moncks Corner (Lawyers Weekly No. 001-045-17, 24 pp.) (Wilkinson, J.) No. 16-1039, Feb. 15, 2017; USDC at Charleston, S.C. (Houck, J.) 4th Cir.
Holding: A police chief has qualified immunity from this civil rights suit filed by two police officers who claim their First Amendment rights were violated when they allegedly were fired in retaliation for visiting a recent arrestee on their lunch hour to give him a police department form and encourage him to complain about their supervisor’s alleged use of excessive force in the arrest; the 4th Circuit upholds summary judgment for the police chief.
Right to Counsel – Civil Commitment – SVP – Habeas Corpus
In re Chapman (Lawyers Weekly No. 010-014-17, 16 pp.) (Kaye Hearn, J.) (John Few, J., dissenting) Appealed from Greenville County Circuit Court (Robin Stilwell, J.) S.C. S. Ct.
Holding: Under the Sexually Violent Predator Act, a person committed as a sexually violent predator (SVP) has the right to assistance of counsel during all stages of SVP proceedings; we hold that such a person necessarily has a right to effective assistance of counsel during the proceedings. Since there is no statutory process for challenging the effectiveness of counsel’s assistance, a person committed as an SVP must contest counsel’s effectiveness via a habeas corpus proceeding; however, (1) the committed person is entitled to counsel during the habeas proceeding and (2) the standard for determining the SVP proceeding counsel’s effectiveness will be judged pursuant to Strickland v. Washington, 466 U.S. 668 (1984).
We affirm appellant’s commitment as an SVP without prejudice to his filing a future habeas corpus petition.
Right to Marriage – Birth Certificate – Artificial Insemination
Carson v. Heigel (Lawyers Weekly No. 002-062-17, 6 pp.) (Mary Geiger Lewis, J.) 3:16-cv-00045; D.S.C.
Holding: If a woman in an opposite-sex couple has a baby as a result of artificial insemination, her husband is listed as a parent on the child’s birth certificate; however, when a woman in a same-sex couple gave birth as a result of artificial insemination, defendant refused to list her spouse as a parent on the twins’ birth certificate. Defendant’s failure to treat same-sex spouses in the same manner in which she treats opposite-sex spouses in the issuance of birth certificates violates plaintiffs’ rights under the Fourteenth Amendment to the U.S. Constitution.
The court grants plaintiffs’ motion for summary judgment on the merits of their constitutional and declaratory judgment claims. An agreement between the parties renders moot plaintiffs’ motion for summary judgment seeking injunctive relief.
AG Could Veto FCA Proposed Settlement
U.S. ex rel. Brianna Michaels v. Agape Senior Community Inc. v. U.S. (Lawyers Weekly No. 001-037-17, 27 pp.) (King, J.) No. 15-2145, Feb. 14, 2017; USDC at Rock Hill, S.C. (Anderson, J.) 4th Cir.
Holding: In this qui tam action alleging defendant elder care facilities fraudulently billed Medicare and other federal health care programs, the 4th Circuit affirms a district court ruling that the Attorney General, who did not intervene in the FCA suit, has unreviewable authority under 31 U.S.C. § 3730 to veto relators’ proposed settlement with the facilities; however, the relators’ appeal of the district court’s rejection of their request to use statistical sampling in their case is dismissed as improvidently granted.
Forum Selection Clause – Enforceability – Venue Transfer
Dearbury Oil & Gas, Inc. v. Lykins Companies (Lawyers Weekly No. 002-071-17, 6 pp.) (Mary Geiger Lewis, J.) 7:16-cv-00923; D.S.C.
Holding: The court agrees with plaintiff that defendants may not enforce the forum selection clauses in the parties’ contracts without establishing that the contracts themselves are enforceable. The complaint sets forth factual allegations which, if true, establish offer, acceptance and valuable consideration; therefore, for purposes of deciding this motion, the court holds that the contracts are valid and enforceable. With that holding, it necessarily follows that the forum selection clauses in the contracts are also valid and enforceable.
The court grants defendants’ motion to transfer venue to the U.S. District Court of Ohio, Columbus Division.
Professional Negligence – Business Entity – Expert Affidavit Requirement
Village Park Homes LLC v. Hancock Askew & Co LLP (Lawyers Weekly No. 002-009-17, 10 pp.) (David Norton, J.) 9:16-cv-02828; D.S.C.
Holding: Where plaintiffs have named only a business entity – no individuals – as the defendant in their professional negligence claim, S.C. Code Ann. § 15-36-100(B) of the South Carolina Frivolous Civil Proceedings Sanctions Act does not apply; therefore, plaintiffs were not required to file the affidavit of an expert witness as part of their complaint.
The court denies defendant’s motion to dismiss.
Settlement Agreement – Open Court Releases – Search Engine Rules – Defamation
Coates v. Simchon (Lawyers Weekly No. 011-011-17, 4 pp.) (Per Curiam) Appealed from Abbeville & Greenwood Counties (Eugene Griffith Jr., Circuit Court Judge) S.C. App. Unpub.
Holding: Other than appellants’ allegation, there is no evidence in the record that respondent Coates ever agreed to sign a consent order that included a finding of defamation against appellants Bay Island Sportswear, Inc., and Sam Simchon. Therefore, the circuit correctly declined to direct Coates to perform an action not contemplated in the record.
We affirm the trial court’s enforcement of the parties’ settlement agreement.
Attorneys – Ineffective Assistance Claim – Failures to Object – No Prejudice – Victim Impact
Stone v. State (Lawyers Weekly No. 010-010-17, 33 pp.) (John Few, J.) (Kaye Hearn, J., concurring in the result only without separate opinion) (Costa Pleicones, Acting Justice, dissenting) Appealed from Sumter County (Michael Nettles, PCR Judge) S.C. S. Ct.
Holding: Trial counsel should have objected to several parts of the state’s victim-impact evidence, especially the widow’s testimony about her suicide attempt. However, even if the objections had been made and sustained, petitioner has not shown that they would have changed the outcome of this case.
We affirm the post-conviction relief (PCR) court’s denial of petitioner’s application for PCR from his second capital sentencing proceeding.
Closing Arguments – Last Summation – New Matters – Judge’s Remarks – Burden of Proof
State v. Beaty (Lawyers Weekly No. 010-002-17, 9 pp.) (Costa Pleicones, C.J.) (John Few, J., concurring in part & dissenting in part) Appealed from Laruens County Circuit Court (W. Jeffrey Young, J.) S.C. S. Ct.
Holding: In a criminal trial where the party with the “middle” argument asks, the party with the right to the first and last closing argument must open in full on the law and the facts, and in reply may respond in full to the other party’s argument but may not raise new matter. In this case, any error in the trial court’s denial of defendant’s motion to require the state to open in full and limit its reply was harmless beyond a reasonable doubt.
Defendant’s murder conviction and life sentence are affirmed.
Constitutional – Ineffective Assistance of Counsel – Conflict of Interest – Unrecognized
Gonzales v. State (Lawyers Weekly No. 010-004-17, 9 pp.) (Costa Pleicones, Acting Justice) Appealed from Spartanburg County (Roger Couch, PCR Judge) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: Regardless of whether or not petitioner’s trial counsel recognized the existence of a conflict of interest, since petitioner showed that the conflict adversely affected his attorney’s performance, he is entitled to relief.
We reverse the Court of Appeals’ ruling that, because trial counsel failed to recognize the actual conflict of interest, petitioner could not show he was adversely affected.
Court Could Consider Statements to Therapist
U.S. v. Lara (Lawyers Weekly No. 001-069-17, 12 pp.) (Keenan, J.) No. 15-4767, March 14, 2017; USDC at Abingdon, Va. (Jones, J.) 4th Cir.
Holding: Although defendant contends he was forced to waive a psychotherapist-patient privilege as part of a program of sex-offender treatment that was a condition of his supervised probation, the district court was entitled to rely on his statements to a therapist about sexual contacts with minors, forcible sexual assaults and his involvement in two murders, in sentencing defendant for violation of the Sex Offender Registration and Notification Act; the 4th Circuit upholds imposition of the statutory maximum penalty of 120 months in prison.
Lawyer Did Not Challenge Juror’s Cryptic Comment
U.S. v. Powell (Lawyers Weekly No. 001-058-17, 10 pp.) (Niemeyer, J.) No. 15-6232, March 1, 2017; USDC at Raleigh, N.C. (Fox, J.) 4th Cir.
Holding: A defendant convicted on federal drug and firearms charges is not entitled to habeas relief on a claim that his counsel was constitutionally ineffective when she failed to tell the trial court that, before trial began, a juror approached defendant’s father and told him “everything would be alright” and he needed to give his son “a good kick in the butt.”
Lesser Included Offense – Stalking & Harassment – Intrusion & Emotional Distress
State v. Brandenburg (Lawyers Weekly No. 011-017-17, 10 pp.) (H. Bruce Williams, J.) Appealed from Abbeville County Circuit Court (Thomas Hughston Jr., J.) S.C. App.
Holding: The definition of harassment in S.C. Code Ann. § 16-3-1700(A) includes the elements of intrusion into the private life of a targeted person and the causing of mental or emotional distress, but the definition of stalking in S.C. Code Ann. § 16-3-1700(C) does not. Nevertheless, harassment is a lesser included offense of stalking because (1) “intrusion” in the harassment statute equates to the “words … or conduct” element in the stalking statute, (2) the “fear” element of stalking satisfies the “mental or emotional distress” element of harassment, and (3) harassment has traditionally been considered a lesser included offense of stalking.
We affirm the circuit court’s decision to charge the jury on first-degree harassment as a lesser included offense of stalking.
Post-Resentencing Habeas Petition Not ‘Successive’
In re: William Robert Gray Jr. (Lawyers Weekly No. 001-054-17, 11 pp.) (Gregory, J.) No. 16-433, Feb. 28, 2017; On Motion for Authorization; 4th Cir.
Holding: A habeas petition filed after defendant was resentenced for a 1993 murder conviction counts as his first petition under 28 U.S.C. § 2254 to challenge the new judgment; the 4th Circuit says the petition is not second or successive and denies petitioner’s motion seeking leave to file a successive petition, as unnecessary.
Rule 403, SCRE – Criminal Profiling Testimony – Harmless Error
State v. Huckabee (Lawyers Weekly No. 011-020-17, 16 pp.) (John Geathers, J.) Appealed from Marlboro County Circuit Court (Michael Baxley, J.) S.C. App.
Holding: Testimony that was not expressly offered to identify defendant as the perpetrator but that included criminal profiling testimony that could lead a reasonable juror to no other inference than that defendant inflicted burns on a child and therefore had a propensity to commit sexual battery resulting in injury had no probative value, and the danger of unfair prejudice was high due to the testimony’s tendency to suggest defendant’s guilt on an improper basis. The testimony should have been excluded under Rule 403, SCRE.
We reverse defendant’s convictions for first-degree criminal sexual conduct (SCS) with a minor, inflicting great bodily injury upon a child, and homicide by child abuse (HCA) and remand for a new trial on these charges. We affirm defendant’s conviction for unlawful conduct toward a child.
Search & Seizure – Curtilage Entry – Officers’ Purpose – Drug Search
State v. Bash (Lawyers Weekly No. 010-001-17, 14 pp.) (John Few, J.) Appealed from Berkeley County Circuit Court (Stephanie McDonald, J.) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: After receiving an anonymous tip about “drug activity” at a home near Moncks Corner, officers entered the home’s curtilage in order to investigate the complaint; in doing so, the officers were conducting a warrantless search within the meaning of the Fourth Amendment, and their search did not fall within a recognized exception to the Fourth Amendment’s warrant requirement.
We reverse the Court of Appeals’ decision and reinstate the circuit court’s grant of defendant’s motion to suppress evidence obtained as a result of the warrantless search.
Weapons Frisk Upheld, Despite Open Carry Law
U.S. v. Robinson (Lawyers Weekly No. 001-015-17, 58 pp.) (Niemeyer, J.) No. 14-4902, Jan. 23, 2017; USDC at Martinsburg, W.Va. (Groh, J.) 4th Cir.
Holding: An anonymous tip that a black man had loaded a gun in a 7-Eleven parking lot and then concealed it in his pocket before leaving in a car provided an objective basis for inferring danger, despite West Virginia gun ownership laws, and an officer who followed up and made a lawful traffic stop had reasonable suspicion to justify a weapons frisk; on rehearing en banc, the 4th Circuit panel affirms defendant’s conviction for possession of a gun as a convicted felon.
Common Law Marriage – Same-Sex Couple – Obergefell’s Retroactivity
Parks v. Lee (Lawyers Weekly No. 008-001-17, 9 pp.) (Thomas White IV, J.) York County Family Court 2016-DR-45-1061
Holding: Ignoring South Carolina’s past unconstitutional law prohibiting same-sex marriage, the court finds that a same-sex couple who lived together in South Carolina for 28 years had a common-law marriage.
Parent & Child – Termination of Parental Rights – Incarcerated Parent
South Carolina Department of Social Services v. Smith (Lawyers Weekly No. 011-019-17, 13 pp.) (Per Curiam) Appealed from Union County Family Court (Rochelle Conits, J.) S.C. App.
Holding: Even though the defendant-father was incarcerated as the result of his own lawless conduct, since he committed his criminal actions before the mother became pregnant with his child and he surrendered after learning of the pregnancy so he could begin his sentence immediately, the father’s lawless conduct is not highly probative of willfulness.
The trial court erred by terminating the father’s parental rights based on abandonment, willful failure to visit, and willful failure to support. Vacated in part, reversed in part, and remanded.
Asylum Protection Lost Through Status Change
Mahmood v. Sessions (Lawyers Weekly No. 001-055-17, 16 pp.) (Niemeyer, J.) No. 16-1438, Feb. 22, 2017; On Petition for Review; 4th Cir.
Holding: A Pakistani citizen initially granted asylum, who voluntarily adjusted his status to lawful permanent resident, is not entitled to additional protections that would have been available to an asylee prior to his removal for misrepresenting facts in order to obtain travel documents; the 4th Circuit affirms the decision of the Board of Immigration Appeals.
Auto – ‘Accident’ – Multi-Vehicle – Coverage Limit
Travelers Home & Marine Insurance Co. v. Grainger (Lawyers Weekly No. 002-038-17, 5 pp.) (Richard Mark Gergel, J.) 4:15-cv-03260 D.S.C.
Holding: Although South Carolina’s appellate courts have not directly addressed the issue of whether two motorcycles colliding with a truck in quick succession constitutes a single accident or two accidents, the South Carolina Supreme Court has characterized a multiple collision incident as a single accident. Therefore, defendants’ accident would be commonly described as a “multi-vehicle accident,” and since there was only one accident, plaintiff’s policy provides only $500,000 of coverage.
The court grants plaintiff’s motion for summary judgment.
CGL – Framing Contractor – Additional Insured – Bad Faith Claim – Indemnification
UFP Eastern Division, Inc. v. Selective Insurance Co. of South Carolina (Lawyers Weekly No. 002-049-17, 13 pp.) (Richard Mark Gergel, J.) 4:14-cv-02801; D.S.C.
Holding: Even though the plaintiff contractor is an “additional insured” rather than a “named insured” under its subcontractor’s insurance policy, plaintiff may still bring a claim for bad faith refusal to pay benefits under the policy.
The parties’ motions for summary judgment are denied.
CGL – Hazing Exclusion – Fraternity Alumnus – Pledge’s Kidney Damage
State Farm Fire & Casualty Co. v. Admiral Insurance Co. (Lawyers Weekly No. 002-036-17, 7 pp.) (Richard Mark Gergel, J.) 4:15-cv-02745; D.S.C.
Holding: At a hazing ritual at the plaintiff-alumnus’s home, the alum did not himself participate in the paddling that caused a pledge to suffer renal failure. However, since the alum hosted the event and admittedly could have stopped it at any time, defendant’s hazing exclusion relieved defendant of the duty to defend or indemnify the alum in the underlying lawsuit brought by the pledge.
Summary judgment for defendant.
CGL – Progressive Damage – Allocation – Time on the Risk – Compensatory & Punitive Damages
Harleysville Group Insurance v. Heritage Communities, Inc. (Lawyers Weekly No. 010-007-17, 33 pp.) (John Kittredge, J.) (Costa Pleicones, Acting Justice, dissenting) Appealed from Horry County (John Milling, Special Referee) S.C. S. Ct.
Holding: Where the plaintiff-insurer defended its insured under a reservation of rights, the insurer had a duty to inform the insured of the need for an allocated verdict as to covered versus non-covered damages.
Furthermore, in this case, the punitive damages award is not allocable since the record demonstrates that all of the insured’s reprehensible acts took place during the policies’ terms.
Affirmed in part and affirmed as modified in part.
Professional Malpractice – Accountants – Coverage Amount – Claims Reporting
CAMICO Mutual Insurance Co. v. Jackson CPA Firm (Lawyers Weekly No. 002-011-17, 27 pp.) (Patrick Michael Duffy, J.) 2:15-cv-01823; D.S.C.
Holding: Although the defendant-accountants bought a $1,000,000 professional negligence policy from the plaintiff-insurer, since defendants learned of a potential claim against them during their 2010-2011 policy year but did not report it to plaintiff until the 2011-2012 policy year, the policy limits coverage to $100,000 for the client’s claim and the accountants’ defense costs. Furthermore, since multiple clients’ claims stem from the same source – a now-retired accountant’s declining performance due to his struggle with Parkinson’s disease – all clients’ claims are limited to the same $100,000.
The court declares that (1) the multiple clients’ claims constitute a single claim under the 2011-2012 policy; (2) the 2011-2012 policy provides $100,000 of coverage for indemnity and defense costs for that combined claim, less $20,600 that has already been paid to settle with one client and defense costs in the clients’ lawsuits; (3) assuming South Carolina’s substantial-prejudice doctrine applies here, plaintiff has proven such prejudice; and (4) defendant Frank Jackson does not have coverage as an innocent insured. Furthermore, plaintiff is entitled to judgment on the accountants’ counterclaims.
Trademark – Subject Matter Jurisdiction
Marshall Tucker Band, Inc. v M T Industries (Lawyers Weekly No. 002-079-17, 11 pp.) (Mary Geiger Lewis, J.) 7:16-cv-00420; D.S.C.
Holding: Plaintiff-musical group does not show that defendant-corporation has used The Marshall Tucker Band mark in commerce, therefore federal actions for trademark infringement and trademark dilution are dismissed. Following this dismissal, the court no longer has the independent basis for subject matter jurisdiction over the federal claims for declaratory judgment and trademark cancellation. The court declines to exercise supplemental jurisdiction over musical group’s remaining state law claims.
Labor & Employment
Contract – Confidentiality & Covenant Not to Compete – No Time Limit – Ohio Law
Fay v. Total Quality Logistics, LLC (Lawyers Weekly No. 011-018-17, 15 pp.) (Paula Thomas, J.) (John Geathers, J., concurring) Appealed from Charleston County Circuit Court (Roger Young Sr., J.) S.C. App.
Holding: The confidentiality provisions of the parties’ employment contract function as a covenant not to compete, but they lack any time restriction. Although the contract is governed by Ohio law, which permits blue penciling, it would violate our public policy for this court to insert a reasonable time restriction because doing so would add a term to which the parties did not agree.
We reverse the circuit court’s grant of partial summary judgment for defendant. We dismiss defendant’s appeal because a party may not appeal the denial of summary judgment.
Labor & Employment
Contract – Job Description – Wrongful Termination – Paint Fumes
Martin v. Boeing Co. (Lawyers Weekly No. 002-002-17, 14 pp.) (David Norton, J.) 2:16-cv-02797; D.S.C.
Holding: It does not appear that South Carolina courts have directly contemplated whether a job description creates an employment contract. The court is guided by Peralta v. Cendant Corp., 123 F. Supp. 2d 65 (D. Conn. 2000), in determining that plaintiff’s job description does not create a contractual obligation on the part of the defendant-employer.
Plaintiff’s motion to amend his complaint is denied as futile. Defendant’s motion to dismiss is granted.
Labor & Employment
Court Sets Test for ‘Joint Employer’
Salinas v. Commercial Interiors Inc. (Lawyers Weekly No. 001-024-17, 54 pp.) (Wynn, J.) No. 15-1915, Jan. 25, 2017; USDC at Greenbelt, Md. (Motz, J.) 4th Cir.
Holding: The 4th Circuit reverses summary judgment for defendants in this wage and overtime-pay suit under state and federal law filed by plaintiff drywall installers; the appeals court sets forth its own test for “joint employer” relationships under the FLSA, and says the district court erred in holding that defendants were not joint employers, but had a “legitimate contractor-subcontractor relationship.”
Labor & Employment
SCPWA – Tips as Wages – Taxation – Over-reported Tips – Civil Practice – Class Action
Carbone v. Zen 333 Inc. (Lawyers Weekly No. 002-008-17, 24 pp.) (David Norton, J.) 2:16-cv-00108; D.S.C.
Holding: Since tips are given as compensation for labor, they plainly fall within the scope of the phrase “all amounts at which labor is rendered [are] recompensed.” S.C. Code Ann. § 41-10-10. There is nothing in the South Carolina Payment of Wages Act definition stating that a “wage” must come from the employer. A straightforward reading of the statute indicates that tips are considered wages under the SCPWA.
The court denies defendants’ motion to dismiss plaintiffs’ SCPWA claim. The court grants defendants’ motion to dismiss plaintiffs’ claim under the Internal Revenue Code (IRC), but does so without prejudice. The court grants plaintiffs’ motion for conditional class certification.
Development vs. Improvement – Separate Meanings
Hanold v. Watson’s Orchard Property Owners Association, Inc. (Lawyers Weekly No. 010-011-17, 5 pp.) (Kaye Hearn, J.) (Costa Pleicones, Acting Justice, joined by John Few, J., concurring) Appealed from Greenville County Circuit Court (Edward Miller, J.) On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: We write only to clarify that the terms “developed” and “improved” may not be used interchangeably. The requirements for improved land, such as the installation of utilities or buildings, are not necessary to meet the lower threshold of developed land, which connotes conversion of raw land into an area suitable for building, residential, or business purposes.
Although the Court of Appeals should have limited its inquiry to consider only evidence as it relates to “developed” lots, any error in conflating the two terms did not affect the outcome in this case, and we agree with the Court of Appeals’ conclusion that petitioners did not “develop” their property. Affirmed.
Admissions Tax – Administrative Remedies – Exhaustion Required – No Class Actions
Lightner v. Hampton Hall Club, Inc. (Lawyers Weekly No. 010-009-17, 12 pp.) (Donald Beatty, C.J.) (John Few, J., concurring) Appealed from Beaufort County Circuit Court (Perry Buckner III, J.) S.C. S. Ct.
Holding: The South Carolina Revenue Procedures Act applies not only to disputes concerning property taxes, but also to disputes with the Department of Revenue concerning other types of taxes.
We reverse the circuit court’s ruling that the SCRPA does not apply to plaintiff’s claim concerning admissions taxes. We affirm the circuit court’s determination that plaintiff may not bring a class action.
Exec’s Stock Was Not Company ‘Expense’
Qinetiq US Holdings Inc. v. Comm’r of Internal Revenue (Lawyers Weekly No. 001-010-17, 22 pp.) (Keenan, J.) No. 15-2192, Jan. 6, 2017; USTC; 4th Cir.
Holding: The 4th Circuit upholds a U.S. Tax Court decision that appellant company was not entitled to a tax deduction for the value of stock, issued as compensation to an executive, as a trade or business expense in 2009; the IRS complied with all applicable procedural requirements in issuing a Notice of Deficiency to the company, and the tax court did not err in concluding that the stock failed to qualify as a deductible expense for the 2009 tax year because the stock was not issued subject to a substantial risk of forfeiture.
Real Property – Homestead Exemption – Hilton Head Rental
Mead v. Beaufort County Assessor (Lawyers Weekly No. 011-001-17, 14 pp.) (Aphrodite Konduros, J.) Appealed from the Administrative Law Court (John McLeod, ALJ) S.C. App.
Holding: Even though the taxpayer (who is over 65) rented out his Hilton Head home for at least 138 days in 2011, he is still entitled to the homestead exemption for his home.
We modify and affirm the Administrative Law Court’s ruling in favor of the taxpayer.
Negligent Hiring & Supervision – Truck Driver – Jug-Handle Maneuver
Holcombe v. Helena Chemical Co. (Lawyers Weekly No. 002-068-17, 13 pp.) (Patrick Michael Duffy, J.) 2:15-cv-02852; D.S.C.
Holding: Even though plaintiff does not allege that defendant’s truck driver intended any harm when he performed an unsafe turn, the court is not persuaded that South Carolina law makes intentional harm an indispensable element of every negligent supervision case.
The court grants in part and denies in part defendant’s motion for partial summary judgment. The court denies plaintiff’s motion to determine the sufficiency of defendant’s objection to a request for admission.
Trusts & Estates
Taxation – Real Property – Notice
Evans v. Richardson (Lawyers Weekly No. 002-035-17, 12 pp.) (Joseph Anderson Jr., J.) 3:16-cv-03202; D.S.C.
Holding: Where plaintiff’s sister was appointed as the personal representative of their mother’s estate, and where the sister failed to pay the taxes on the mother’s real property, plaintiff himself was not entitled to notice of the tax sale.
Defendants’ motion to dismiss is granted.
Scheduled-Member Statute – Substantial Evidence – Rebuttable Presumption
Clemmons v. Lowe’s Home Centers, Inc. (Lawyers Weekly No. 010-017-17, 10 pp.) (Kaye Hearn, J.) (John Kittredge, J., concurring in the result only without separate opinion) (Costa Pleicones, Acting Justice, concurring in part & dissenting in part) Appealed from the Workers’ Compensation Commission. On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: After his on-the-job back injury, the claimant-employee returned to work with restrictions. Since the only other relevant evidence was his doctor’s assignment of a 71 percent impairment rating to his spine, employee was entitled to recover under the scheduled member statute.
We reverse the Workers’ Compensation Commission’s denial of such benefits.