Civil Practice – Global Settlement Agreement – Personal and Subject Matter Jurisdiction

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Global Settlement Agreement and Addendum do not bar the Receiver’s action in Florida. However, as there is no prevailing party at this stage of the proceedings we reversed the circuit court’s award of liquidated damages.

We affirmed in part and reversed in part.

Arthur Field and Kathryn Taillon appealed an order of the circuit court granting a Receiver declaratory relief and finding the Receiver’s action to collect on a civil judgment from Field in Florida permitted under the Global Settlement Agreement (GSA).

This case arose out of a complicated history of litigation involving lawsuits in state and federal courts, along with criminal charges, all of which relate to Field’s conduct in operating CIF. In 2008, CIF investors, led by William Tomz and Francis Tomz, initiated a class action, over which Judge Edward Miller presided. Additionally, Field pleaded guilty to securities fraud, conspiracy, and forgery in a 2013 case prosecuted by the South Carolina Attorney General’s office. Field was ordered to pay $2,877,711.73 in restitution in that case.

In 2017, the parties reached an agreement to settle five pending civil cases via the GSA. However, the GSA did not, and could not, resolve the criminal action. Per the GSA’s terms, Judge Miller retained “sole and exclusive jurisdiction regarding any dispute related to the enforcement, performance or non-performance of any future obligation contained” in the GSA. Additionally, the GSA included a liquidated damages provision stating that if any party “file[d] any suit or claim wherein he/she/they/it attempt[ed] to revoke or disqualify any term” of the GSA, the “prevailing party” would “be entitled [to] a minimum of $250,000.00 as liquidated damages for defending, responding or enforcing the terms” of the agreement. However, Field wished to move to Florida, and the GSA was contingent upon the court modifying the terms of his probation.

At the hearing on Field’s motion to modify his probation, the parties negotiated an addendum, which deleted language from the GSA stating Field would not owe further restitution and that his restitution obligations would be satisfied in full. Instead, the parties agreed that any payments made or properties transferred to CIF pursuant to the GSA would be credited towards Field’s restitution obligation and any balance remaining at the end of his term of probation could be converted “to a civil judgment pursuant to the applicable laws of the State of South Carolina.” An order was issued for a civil judgment in favor of Receiver in the amount of $1,767,634.71—the remaining balance of restitution after applying the credits outlined in the Addendum.

After the approval of the GSA, Field and Taillon moved to Florida. The Receiver domesticated the civil judgment in Florida. One week later, Field filed a notice of Homestead Exemption. The court found, among other things, that (1) the GSA did not release Field’s liability or obligations pursuant to his criminal restitution; and (2) the Receiver’s motion did not require a separate action under the SCUDJA. Additionally, the court imposed liquidated damages against Field, finding his “multiple filings within the state of Florida and his repeated efforts to deny” South Carolina’s jurisdiction, along with his “attempt to argue he [wa]s no longer obligated to pay restitution” amounted to “an attempt to disqualify the terms of the GSA.”

Although we agreed the GSA contemplated dismissal of the 2008 action, it also imposed a requirement on counsel of record to “file appropriate notices in each of the pending actions” upon the completion of certain events; no such notices appear in the record before us. Field and Taillon agreed to reserve exclusive jurisdiction in Judge Miller and the circuit court to resolve any questions “related to enforcement” of the GSA and Addendum, which is clearly the focus of the Receiver’s motion. Therefore, the circuit court had personal and subject matter jurisdiction.

The circuit court correctly found the GSA and Addendum did not bar the Receiver’s attempt to enforce the civil judgment in Florida. We held the GSA and Addendum are unambiguous and their force and effect can be determined from their language alone. Therefore, we affirmed the circuit court’s finding that the GSA and Addendum do not bar the Receiver’s action in Florida.

We held the language of the liquidated damages provision in the GSA is clear and unambiguous. By its plain language, liquidated damages are only available to a “prevailing party” in an action in which another party files a suit or claim and attempts to “revoke or disqualify any term” of the GSA. This court was asked only to interpret the terms of the GSA and Addendum, and the merits of the judgment collection in Florida have not been determined. Accordingly, there is no prevailing party at this stage of the proceedings. Thus, we reversed the circuit court’s award of liquidated damages.

Affirmed in part and reversed in part.

Tomz v. Capital Investment Funding LLC (Lawyers’ Weekly No. 012-056-25, 8 pp.) (Per Curiam) Appealed from Greenville County Circuit Court (Jean H. Toal, J.) Micajah Pickett Caskey, IV, of Caskey Law Firm, P.A., of West Columbia, for Appellant Arthur M. Field; Jeffrey P. Dunlaevy, of Dunlaevy Law Firm, of Greenville, for Appellant Kathryn Taillon. George Brandt, III, of Henderson Brandt & Vieth, PA, of Spartanburg, for Respondents Capital Investment Funding, LLC, and Jerry T. Saad; Gene McCain Connell, Jr., of Kelaher Connell & Connor, PC, of Surfside Beach, and Stanley T. Case, of Spartanburg, both for Respondents William F. Tomz and Frances W. Tomz. South Carolina Court of Appeals Unpublished