Contract – Rule 55 of the South Carolina Rules of Civil Procedure – Entry of Default

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The circuit court did not abuse its discretion when it granted TD Bank’s motion for relief from entry of default.

We affirmed pursuant to Rule 220(b), SCACR.

Stevens Builders, LLC appealed the circuit court’s order granting summary judgment in favor of TD Bank, N.A. On appeal, it argued the circuit court erred in (1) granting TD Bank’s motion to be relieved from entry of default, (2) denying Stevens Builders’ motion for entry of default judgment, and (3) finding there were no genuine issues of material fact regarding its breach of contract claim.

The circuit court did not abuse its discretion when it found good cause existed and granted TD Bank’s motion for relief from entry of default because Rule 55(c) of the South Carolina Rules of Civil Procedure does not require oral testimony or affidavits for a court to grant relief from entry of default, TD Bank provided an explanation for its default, and the three good cause factors weighed in favor of TD Bank. Rule 55(c) only requires a party provide an explanation for the default and why relief therefrom would serve the interests of justice; it does not require a party specifically present affidavits or oral testimony. TD Bank provided an explanation for its default: it was served with a high volume of mechanic’s lien cases that did not require an answer, Stevens Builders’ complaint was styled as a mechanic’s lien case, and its cause of action for breach of contract only composed a small portion of the complaint. There is evidence to support the circuit court’s finding of good cause and that the three factors weighed in favor of TD Bank because it provided an explanation for default, filed its motion when it learned of the action, and had meritorious defenses to the breach of contract claim. Further, Stevens Builders was not specifically prejudiced by further delays in the litigation.

The circuit court did not abuse its discretion when it denied Stevens Builders’ third motion for entry of default because, although the circuit court’s order stated TD Bank was to file an answer or other pleading, Rule 55(a) of the South Carolina Rules of Civil Procedure only permits an entry of default when the party fails to answer or otherwise defend, which TD Bank did when it filed a motion to dismiss.

The circuit court did not err in granting TD Bank’s motion for summary judgment because the construction loan agreement (CLA) was clear and unambiguous as to when TD Bank must make a disbursement, the fact that TD Bank had the sole discretion to change the timing and amount of disbursements listed in any schedule, and that progress reports were determined by TD Bank’s sole discretion and for its benefit only. Although Stevens Builders argues that the existence of a worksheet at the inception of the CLA made the CLA ambiguous, the express terms of the CLA provided that TD Bank could, in its sole discretion, change the timing and amounts of disbursements listed in any schedule, which would include any worksheet, and that the progress reports generated were for TD Bank’s benefit only and made in its own discretion. Further, the CLA explicitly stated that before TD Bank was to disburse funds, the lenders must present written demand from Stevens Builders, which did not occur; accordingly, there were no issues of material fact as to any element of a breach of contract claim.

Affirmed.

Stevens Builders LLC v. Garraway (Lawyers’ Weekly No. 012-018-25, 4 pp.) (Per Curiam) Appealed from Beaufort County Circuit Court (Carmen T. Mullen, J., Maite Murphy, J., and Marvin H. Dukes, III, J.) Benjamin Terrell Coppage, of Coppage Law Firm, LLC, of Beaufort, for Appellant; James Martin Page, of Bell Carrington Price & Gregg, LLC, of Columbia, for Respondent. South Carolina Court of Appeals Unpublished