Justia Consumer Law Opinion Summaries

Articles Posted in South Carolina Supreme Court
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Petitioners Rick Hendrick Dodge Chrysler Jeep Ram (Rick Hendrick Dodge) and Isiah White argued an arbitrator had to decide whether they could enforce an arbitration provision in a contract even after that contract had been assigned to a third party. The court of appeals rejected this argument and affirmed the circuit court's determinations that: (1) the circuit court was the proper forum for deciding the gateway question of whether the dispute is arbitrable; and (2) Petitioners could not compel arbitration because Rick Hendrick Dodge assigned the contract to a third party. The South Carolina Supreme Court held that the doctrine announced in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) required the arbitrator to decide whether the assignment extinguished Petitioners' right to compel arbitration. Therefore, the Court reversed the court of appeals' decision and vacated the circuit court's discovery order. View "Sanders v. Savannah Highway Automotive Company" on Justia Law

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In 2018, Appellant Nationwide Affinity Insurance Company of America (Nationwide) issued a personal automobile insurance policy to Shameika Clark, Respondent Andrew Green's mother. The policy included $25,000 in UIM property damage coverage for Clark and her family members. The general definition section broadly defined "property damage" as "physical injury to, destruction of[,] or loss of use of tangible property." The UIM endorsement, however, more narrowly defined "property damage" as "injury to or destruction of 'your covered auto.'" In October 2018, Green was hit by a vehicle while walking home from school. Green pursued a claim against Nationwide for UIM bodily injury, but Nationwide refused to pay because the accident did not result in “damage to a “covered auto.” Nationwide filed this declaratory judgment action and requested a declaration that Green was not entitled to UIM property damage. The circuit court reformed Nationwide’s policy rider issued to Clark, finding that under South Carolina case law, insurers could not limit that coverage to vehicles defined in policy as “covered autos.” The South Carolina Supreme Court affirmed the circuit court’s judgment. View "Nationwide v. Green" on Justia Law

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This case arose from a construction defect suit brought by a number of homeowners (Petitioners) against their homebuilder and general contractor, Lennar Carolinas, LLC (Lennar). Lennar moved to compel arbitration, citing the arbitration provisions in a series of contracts signed by Petitioners at the time they purchased their homes. Petitioners pointed to purportedly unconscionable provisions in the contracts generally and in the arbitration provision specifically. Citing a number of terms in the contracts, and without delineating between the contracts generally and the arbitration provision specifically, the circuit court denied Lennar's motion to compel, finding the contracts were grossly one-sided and unconscionable and, thus, the arbitration provisions contained within those contracts were unenforceable. The court of appeals reversed, explaining that the United States Supreme Court's holding in Prima Paint Corp. v. Flood & Conklin Manufacturing Co. forbade consideration of unconscionable terms outside of an arbitration provision (the Prima Paint doctrine). The court of appeals found the circuit court's analysis ran afoul of the Prima Paint doctrine as it relied on the oppressive nature of terms outside of the arbitration provisions. While the South Carolina Supreme Court agreed that the circuit court violated the Prima Paint doctrine, it nonetheless agreed with Petitioners and found the arbitration provisions, standing alone, contained a number of oppressive and one-sided terms, thereby rendering the provisions unconscionable and unenforceable under South Carolina law. The Court further declined to sever the unconscionable terms from the remainder of the arbitration provisions, as "it would encourage sophisticated parties to intentionally insert unconscionable terms—that often go unchallenged—throughout their contracts, believing the courts would step in and rescue the party from its gross overreach. ... Rather, we merely recognize that where a contract would remain one-sided and be fragmented after severance, the better policy is to decline the invitation for judicial severance." View "Damico v. Lennar Carolinas, LLC et al." on Justia Law

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The United States Court of Appeals for the Fourth Circuit certified a question of law to the South Carolina Supreme Court. John Harley Wickersham Jr. was seriously injured in an automobile accident. After months of severe pain from the injuries he received in the accident, he committed suicide. His widow filed lawsuits for wrongful death, survival, and loss of consortium against Ford Motor Company in state circuit court. She alleged that defects in the airbag system in Mr. Wickersham's Ford Escape enhanced his injuries, increasing the severity of his pain, which in turn proximately caused his suicide. She included causes of action for negligence, strict liability, and breach of warranty. Ford removed the cases to the United States District Court for the District of South Carolina. Ford then filed a motion for summary judgment in the wrongful death suit, arguing Mrs. Wickersham has no wrongful death claim under South Carolina law because Mr. Wickersham's suicide was an intervening act that could not be proximately caused by a defective airbag. The district court denied Ford's motion. 194 F. Supp. 3d at 448. The court ruled Mrs. Wickersham could prevail on the wrongful death claim if she proved the enhanced injuries Mr. Wickersham sustained in the accident as a result of the defective airbag caused severe pain that led to an "uncontrollable impulse" to commit suicide. Ford renewed the motion during and after trial, but the district court denied both motions. A jury ultimately returned a verdict in favor of Mrs. Wickersham on all claims. Ford appealed, and the Fourth Circuit asked: (1) whether South Carolina recognized an "uncontrollable impulse" exception to the general rule that suicide breaks the causal chain for wrongful death claims; and (2) did comparative negligence in causing enhanced injuries apply in a crashworthiness case when the plaintiff alleges claims of strict liability and breach of warranty and is seeking damages related only to the plaintiff's enhanced injuries? The Supreme Court responded that (1) South Carolina did not recognize a general rule that suicide was an intervening act which breaks the chain of causation and categorically precludes recovery in wrongful death actions. "Rather, our courts have applied traditional principles of proximate cause to individual factual situations when considering whether a personal representative has a valid claim for wrongful death from suicide." With respect to the federal court's second question, the Supreme Court held a plaintiff's actions that do not cause an accident but are nevertheless a contributing cause to the enhancement of his injuries, are not necessarily a legally remote cause. "Mr. Wickersham's non-tortious actions that were not misuse are not relevant to Ford's liability for enhancement of his injuries in terms of the defense of comparative negligence or fault." View "Wickersham v. Ford Motor Company" on Justia Law

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In October of 2007, Petitioner Otha Delaney bought a 2003 Chevrolet pick-up truck from Coliseum Motors pursuant to a retail installment sales contract. The dealership subsequently assigned the contract to Respondent First Financial of Charleston, Inc., which acquired a security interest under the UCC. After Delaney failed to make payments, First Financial lawfully repossessed the truck, and on May 2, 2008, it sent Delaney a letter entitled, "Notice of Private Sale of Collateral." Over seven months later, on December 15, 2008, First Financial sold the truck. On October 3, 2011, more than three years after sending notice but less than three years from the sale of the truck, Delaney filed suit against First Financial, seeking to represent a class of individuals who had received notice that allegedly failed to comply with certain requirements in Article 9. After a hearing, the trial court found: (1) the remedy Delaney sought pursuant to section 36-9-625(c)(2) South Carolina Code (2003) was a statutory penalty; (2) the six-year Article 2 limitations period did not apply because Delaney failed to plead breach of contract, the claim solely concerned deficient notice under Article 9, and even if Article 2 applied, the more specific limitations period on penalties governed; and (3) under either limitation period, Delaney's claim was time-barred as his action accrued upon receipt of the allegedly deficient notice. To this last point, the South Carolina Supreme Court determined the trial court erred, holding the notice of disposition of collateral did not accrue until First Financial disposed of the collateral. Accordingly, because Delaney filed this action within three years from that date, the matter was remanded for further proceedings. View "Delaney v. First Financial" on Justia Law

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This appeal arose out of a $17 million verdict rendered in favor of Francis Maybank for claims sounding in contract, tort, and the South Carolina Unfair Trade Practices Act (UTPA). Maybank brought this action alleging he received faulty investment advice from Branch Banking and Trust (BB&T - the Bank) through BB&T Wealth Management (Wealth Management) and BB&T Asset Management (Asset Management), all operating under the corporate umbrella of BB&T Corporation (collectively, Appellants). Appellants appealed on numerous grounds, and Maybank appealed the trial court's denial of prejudgment interest. After review, the Supreme Court reversed as to an award of punitive damages based on a limitation of liability clause. The Court affirmed on all other grounds. View "Maybank v. BB&T" on Justia Law

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Julie Freeman, individually and on behalf of over five-thousand similarly situated car buyers, filed a lawsuit against J.L.H. Investments, LP, a/k/a Hendrick Honda of Easley ("Hendrick"), seeking damages under the South Carolina Dealers Act on the ground that Hendrick "unfairly" and "arbitrarily" charged all of its customers "closing fees" that were not calculated to reimburse Hendrick for actual closing costs. A jury returned a verdict in favor of Freeman in the amount of $1,445,786.00 actual damages. In post-trial rulings, the trial judge: (1) denied Hendrick's motions to overturn or reduce the jury's verdict; (2) granted Freeman's motions to double the actual damages award and to award attorneys' fees and costs; and (3) denied Freeman's motion for prejudgment interest. The South Carolina Supreme Court certified this case from the Court of Appeals, and finding no reversible error, the Supreme Court affirmed. View "Freeman v. J.L.H. Investments" on Justia Law

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Appellants Thomas and Vera Gladden appealed the trial court's order granting summary judgment to Respondent Palmetto Home Inspection Services, alleging the limit of liability provision in a home inspection contract was unenforceable as violative of public policy and as unconscionable under the facts of this case. Upon review, the Supreme Court concluded that contractual limitation of a home inspector's liability did not violate South Carolina public policy as expressed by the General Assembly and, as a matter of law, was not so oppressive that no reasonable person would make it and no fair and honest person would accept it. Accordingly, the Court affirmed the trial court's order granting summary judgment to the inspector. View "Gladden v. Palmetto Home Inspections" on Justia Law

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The Savannah Bank, N.A., (Bank) sought to foreclose on a property owned by Appellant Alphonse Stalliard. Appellant argued that he should not be held liable for a loan closed by a person acting on his behalf under a power of attorney. Appellant alleged, inter alia, that Bank did not conduct reasonable due diligence and did not verify Appellant's ability to pay. He filed a motion seeking additional time for discovery. The master-in-equity denied the motion and ruled in Bank's favor. Appellant appealed that decision, arguing that summary judgment was improper and that the master should have permitted additional time for discovery. Upon review, the Supreme Court held that the master properly denied Appellant's motion. View "Savannah Bank v. Stalliard" on Justia Law

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Petitioner Neeltec Enterprises, Inc., d/b/a/ Fireworks Supermarket, appealed an order requiring it to substitute two corporations as defendants in its SCUPTA suit in lieu of the individual Willard Long against whom it had brought suit. Petitioner operated a fireworks store near I-95. Defendant Long was alleged to have operated a competing fireworks store "Fireworks Superstore" near I-95. Petitioner alleged that Long first changed his store's name to closely resemble Petitioner's. Petitioner then redecorated the outside of his building facing I-95 traffic with an advertising display. Long allegedly retaliated by moving a 45- foot long, 9-foot tall storage container onto his property, effectively blocking travelers' views of Petitioner's wall advertisement. Petitioner alleged that, by his actions, Long had violated the SCUTPA. Long answered, and subsequently filed a "Motion for Summary Judgment or, in the Alternative, for Substitution of Parties." Long asserted he never owned the Fireworks Superstore, but that it had been owned by Hobo Joes, Inc., when the suit was commenced and was now owned by Foxy's Fireworks Superstore, Inc., both South Carolina corporations.  He sought either summary judgment because Petitioner had sued the wrong party or an order that Long be dropped as a party and that Hobo Joe's and Foxy's Fireworks be added as defendants. The special referee granted Long's motion in part, finding he was not "the proper defendant. Petitioner appealed and the Court of Appeals dismissed the appeal. Upon review, the Supreme Court held that the order requiring Petitioner to discontinue its SCUPTA suit against Long affected its substantial right to name its defendant, making it immediately appealable. The decision of the Court of Appeals dismissing the appeal was reversed, and the matter was remanded for consideration of the merits of Petitioner's appeal. View "Neeltec Enterprises v. Long" on Justia Law