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South Carolina
JUDICIAL DEPARTMENT
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2008-10-03-01

STATE OF SOUTH CAROLINA

COUNTY OF RICHLAND

Venture Investment  Properties Group, Inc., 

Plaintiff(s),

v.

Whaley's Mill, L.P., and L. Marc Carter,
JARS at Whaley's Mill, LLC and JARS at

Whaley's Mill II, LLC,

Defendant(s).



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IN THE COURT OF COMMON PLEAS

C.A. No. 2007-CP-40-7742

ORDER

This matter came before the Court on August 19, 2008, pursuant to Defendant L. Marc Carter's Motion for Judgment on the Pleadings with Regard to Any Claims Against L. Marc Carter in his Individual Capacity (filed January 22, 2008) and Plaintiff's Motion to Amend Complaint (filed August 4, 2008). Present at the hearing were William R. Padget, Esquire, and Howard S. Sheftman, Esquire, representing Plaintiff; James K. Lehman, Esquire, and Jeremy C. Hodges, Esquire, representing Defendants Whaley's Mill, L.P. and L. Marc Carter; and Demetri K. Koutrakos, Esquire, representing Defendants JARS at Whaley's Mill, L.L.C., and JARS at Whaley's Mill, II, L.L.C. (collectively the "JARS" Defendants).

Background

This case involves an alleged breach of an agreement for the purchase and sale of certain property. In 2006 Plaintiff began negotiations for the purchase of Whaley's Mill Apartments located at 211 Main Street, Columbia, South Carolina (the "Property") from Whaley's Mill L.P. ("WMLP"). On June 20, 2006, Plaintiff and Defendant WMLP entered into a Purchase and Sale Agreement for the sale of the Property. The Purchase and Sale Agreement was amended and reinstated on seven separate occasions beginning in July 2006 through May 2007 (collectively the "Agreement"). The purchase price of the property after all amendments was $8,650,000.00. Plaintiff never closed on the Property pursuant to the Agreement. In October 2007, Defendant WMLP sold the Property to the JARS Defendants. Plaintiff filed this lawsuit in November 2007 against Defendants WMLP and Carter, and the JARS Defendants.

 Plaintiff's Complaint alleges various causes of action against each Defendant, including breach of contract, breach of contract accompanied by a fraudulent act, fraud, negligent misrepresentation, and unjust enrichment against Defendant WMLP; fraud and negligent misrepresentation against Defendant Carter; and interference with contractual relations, conversion, and quiet title/specific performance against the JARS Defendants.

I. DEFENDANT CARTER'S MOTION FOR JUDGMENT ON THE PLEADINGS WITH REGARD TO ANY CLAIMS AGAINST DEFENDANT CARTER IN HIS INDIVIDUAL CAPACITY

Defendant Carter moves this Court for an Order entering judgment in his favor on all claims based on the pleadings and Complaint of Plaintiff, pursuant to 12(c) of the South Carolina Rules of Civil Procedure, on the ground that Plaintiff has failed to allege any wrongdoing by Defendant Carter in his individual capacity. More specifically, Defendant Carter alleges that Plaintiff's Complaint does not contain a clear indication that Defendant Carter committed any act in his individual capacity or that Plaintiff intended to bring suit against him in his individual capacity. In opposition to Defendant Carter's motion, Plaintiff makes the following arguments: (1) Defendant Carter's contention that the Complaint only names him in a representative capacity is without merit; (2) an agent like Defendant Carter is always liable for his own torts; and (3) the Complaint plainly alleges causes of action for fraud and negligent misrepresentation against Defendant Carter individually.

Standard of Review

"After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." Rule 12(c), SCRCP. When considering such motion, the Court must regard all properly pleaded factual allegations as admitted, and any inference of law or conclusions of fact that may properly arise therefrom are to be regarded as embraced in the averment. Falk v. Sadler, 341 S.C. 281, 533 S.E.2d 350 (Ct. App. 2000). However, the court will not admit inferences drawn by the plaintiff from such facts, nor will it admit conclusions of law. Fireman's Ins. Co. v. Cincinnati Ins. Co., 302 S.C. 234, 235, 394 S.E.2d 855, 856 (Ct. App. 1990). A complaint is sufficient if it states any cause of action or it appears that the plaintiff is entitled to any relief whatsoever. Id. "A judgment on the pleadings against the plaintiff is not proper if there is an issue of fact raised by the complaint which, if resolved in favor of the plaintiff, would entitle him to judgment." Lydia v. Horton, 343 S.C. 376, 540 S.E.2d 102 (Ct. App. 2000), rev'd on other grounds; Douglass ex. rel. Louthian v. Boyce, 336 S.C. 318, 323, 519 S.E.2d 802, 805 (Ct. App. 1999) (citing Russell v. City of Columbia, 305 S.C. 86, 406 S.E.2d 338 (1991)). "Our courts have held the pleadings should be construed liberally so that substantial justice is done between the parties." Falk, 341 S.C. at 287, 533 S.E.2d at 353. Moreover, "a judgment on the pleadings is considered to be a drastic procedure by our courts." Id.

Legal Discussion

In support of its motion, Defendant Carter references Gissel v. Hart, 373 S.C. 281, 644 S.E.2d 772 (Ct. App. 2007), for the proposition that in the absence of a clear statement of a defendant's capacity, a plaintiff is deemed to have sued a defendant in his official capacity. While the Court finds that Gissel is distinguishable from this case on its facts, the analysis conducted by the South Carolina Court of Appeals regarding the Court's determination of the capacity in which one is made a party to a lawsuit is applicable to this case.

According to the Court of Appeals in Gissel, "[w]here the allegations of the complaint indicate with reasonable certainty that a plaintiff sues, or a defendant is sued, in a representative capacity, although not specifically stated, this is sufficient to fix the character of the suit." Gissel, 373 S.C. at 289, 644 S.E.2d at 776 (Ct. App. 2007) (citing 67A C.J.S. Parties § 173, at 722 (2002)). However, "if the complaint is unclear on this issue [of whether a defendant is being sued in an official or representative capacity], …courts will look to the caption of the case, the allegations of the complaint, and the prayer for relief to ascertain the capacity in which the defendant has been sued." Id. at 289, 644 S.E.2d at 776 (quoting Urquhart v. Univ. Health Sys. of E. Carolina, Inc., 151 N.C.App. 590, 591, 566 S.E.2d 143, 145 (2002)). Where capacity is indicated in the caption, the allegations, and the prayer for relief, defendants are deemed to have an "opportunity to prepare for a proper defense and eliminate the unnecessary litigation that arises when parties fail to specify the capacity." Id. at 289, 644 S.E.2d at 777 (citing Paquette v. County of Durham, 155 N.C.App. 415, 421, 573 S.E.2d 715, 719 (2002)). "In the absence of a clear statement of [a] defendant's capacity, a plaintiff is deemed to have sued a defendant in his official capacity." Id. In this case, Plaintiff has not indicated a clear statement of the capacity in which it sued Defendant Carter; therefore, the Court must look to the caption of the case, the allegations, and Plaintiff's prayer for relief.

The Court notes that Plaintiff listed Defendant Carter in the caption but there is no indication as to the capacity in which Defendant Carter has been sued. The Gissel Court noted that merely listing a defendant in the caption "is not determinative of what capacity he is being sued." Id. at 289-290, 644 S.E.2d at 777. Similarly, the Court finds that the allegations and the prayer for relief do not support a finding that Defendant Carter committed any act in his individual capacity or that relief was sought against him other than as the agent and principal of the partnership. The allegations assert causes of action for fraud and negligent misrepresentation against Defendants WMLP and Carter, but fail to indicate that Plaintiff is suing Defendant Carter in his individual capacity or that he acted outside the scope of his official duties as agent and principal of Defendant WMLP when committing the alleged acts in support of these claims. Like the caption and the allegations, Plaintiff's prayer for relief provides no indication of the capacity in which Defendant Carter is being sued because it makes no distinction among Defendants, and does not include any claim that Defendant Carter be held liable in his individual capacity. Thus, in accord with the analysis in Gissel, the Court finds that Plaintiff has failed to clearly identify the capacity in which it is suing Defendant Carter.

Defendant Carter also contends that because the Agreement was attached to the Complaint, it is part of the record and may be consulted by the Court in considering this motion for judgment on the pleadings. The Court agrees that documents attached to the Complaint and made part of the pleadings through incorporation by reference may be consulted when deciding a Rule 12(c) motion, and further finds that the Agreement suggests that Defendant Carter executed the documents in his official capacity. In opposition to Defendant Carter's motion, Plaintiff requests the Court to look at facts beyond the pleadings, including the facts that Defendant Carter was personally served and personally named in discovery requests. However, the Court finds that these matters are improper for the Court to review when deciding a Rule 12(c) motion. See Falk, 341 S.C. 281, 533 S.E.2d 350. 

Plaintiff argues that an agent like Defendant Carter is always liable for his own torts. The Court agrees with Plaintiff, but finds that the issue of whether an agent can be sued and the issue of whether an agent has been sued in his individual capacity are separate and distinct issues. Plaintiff cites Lane v. Home Ins. Co. et al., 190 S.C. 84, 2 S.E.2d 30 (1939), for the proposition that an agent is always individually liable for his own tortious acts. The Court notes that Lane involved the issue of whether corporate agents were necessary parties to a suit against the principal. Id. The South Carolina Supreme Court stated that "…where one acting as an agent for another, within the scope of his agency commits a tort, both the principal and the agent are joint tort-feasors; and [] the injured party is not obliged to join both joint tort-feasors in his action, but he may sue either singly." Id. While the legal analysis in Lane may be correct, it does not negate the requirement whereby a plaintiff must indicate the capacity in which a defendant has been sued.

The Court agrees with Plaintiff that agency liability is not limited to tort cases totally devoid of contractual relationships. Plaintiff relies on Lawlor v. Scheper, 232 S.C. 94, 101 S.E.2d 269 (1957), for the proposition that an agent's liability for his own tortious acts is unaffected by the fact that he acted in a representative capacity. The Court agrees, noting that "in circumstances where an agent has committed a tort against a third person, the agent's liability for the resulting damage is unaffected by the fact he was acting in a representative capacity." Long v. Norris & Associates, LTD., et al., 342 S.C. 561, 538 S.E.2d 5 (Ct. App. 2000) (internal citations omitted). However, the Lawlor Court discussed this issue where the defendant contended that "he was acting, and known to be acting, merely as an agent…and, therefore, cannot be held personally liable…even if actionable, that if there is any liability it is solely the liability of his principal." Lawlor did not discuss the capacity in which an agent can be sued, but rather only that an agent can be held liable for his own conduct even when acting in his representative capacity.

With respect to Plaintiff's arguments involving Gilbert v. Mid-South Machinery Co., Inc., 267 S.C. 211, 227 S.E.2d 189 (1976), and Thomas v. Delta Enterprises, Inc., 302 S.C. 351, 396 S.E.2d 122 (Ct. App. 1990), the Court notes that the capacity in which the agents had been sued was clearly indicated in the captions of the cases. For instance, in Gilbert, the president of the corporate defendant was joined in his individual capacity. In Thomas, the plaintiff went further and indicated in the caption that the agents were sued both individually and as agents. Here, the Court finds that the capacity of Defendant Carter is not stated in the caption, allegations, or Plaintiff's prayer for relief. Under the analysis of the Court of Appeals in Gissel, Plaintiff must indicate the capacity in which it intends to sue Defendant Carter.

The mere fact that an agent can be joined in a suit and is liable for his own tortious conduct does not lead to the conclusion that Defendant Carter is automatically made a party to the suit in his individual capacity or that Plaintiff is not required to allege the capacity in which Defendant Carter is being sued. The Court finds that Plaintiff has sued Defendant Carter in his representative capacity although Plaintiff may have intended to do so in his individual capacity.

The Court further finds that Plaintiff filed its Complaint on November 16, 2007. Defendant Carter filed his Answer and Counterclaims and Motion for Judgment on the Pleadings with Regard to Any Claims Against L. Marc Carter in his Individual Capacity on January 22, 2008. The case was assigned to the Business Court in March 2008. Plaintiff filed its Motion to Amend Complaint thereafter on August 4, 2008. While the Court finds Defendant Carter's arguments to be meritorious, because Plaintiff filed its Motion to Amend Complaint prior to the hearing in this matter, the Court also finds that any defect regarding the capacity in which Plaintiff intends to sue Defendant Carter is cured by the Court's granting of Plaintiff's Motion to Amend Complaint as discussed hereinbelow and is in the spirit of the case law that "a judgment on the pleadings is considered to be a drastic procedure by our Courts." Falk, 341 S.C. at 287, 533 S.E.2d at 353. Thus, entry of judgment in favor of Defendant Carter in his individual capacity is not warranted. Therefore, Defendant Carter's Motion for Judgment on the Pleadings with Regard to Any Claims Against L. Marc Carter in his Individual Capacity is DENIED. However, because the Court finds Defendant Carter's motion to be meritorious, Plaintiff is not entitled to reasonable fees for its defense of the motion.

II.  PLAINTIFF'S MOTION TO AMEND COMPLAINT

Plaintiff moves this Court, by its motion filed August 4, 2008, pursuant to Rule 15(a) of the South Carolina Rules of Civil Procedure for an Order granting Leave to Amend the Complaint in this matter to add an additional defendant and an additional cause of action for rescission against Defendant WMLP.  In its Memorandum in Opposition to Defendant L. Marc Carter's Motion for Judgment on the Pleadings with Regard to Any Claims Against L. Marc Carter in his Individual Capacity, as well as at the hearing, Plaintiff also requested to amend the Complaint to cure any defects related to its intention to sue Defendant Carter in his individual capacity. 

Standard of Review

Rule 15(a), SCRCP, provides in relevant part that "a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires and does not prejudice any other party." Rule 15(a), SCRCP. "The prejudice Rule 15 envisions is a lack of notice that the new issue is going to be tried, and a lack of opportunity to refute it." Parker v. Spartanburg Sanitary Sewer Dist., 362 S.C. 276, 286, 607 S.E.2d 711, 716-17 (Ct. App. 2005). It is well established that the decision whether to grant or deny a Rule 15(a) motion is within the sound discretion of the trial judge, and that "the party opposing the motion has the burden of establishing prejudice." Foggie v. CSX Transportation, Inc., 313 S.C. 98, 103, 431 S.E.2d 587, 590 (1993); City of North Myrtle Beach v. Lewis-Davis, 360 S.C. 225, 232-33, 599 S.E.2d 462, 465 (Ct. App. 2004); Pruitt v. Bowers, 330 S.C. 483, 499 S.E.2d 250, 253 (Ct. App. 1998).

Legal Discussion

Defendants in this case have not consented to Plaintiff's Motion to Amend Complaint to add an additional defendant or an additional cause of action for rescission against Defendant WMLP. However, since Defendants have not shown any evidence of prejudice the Court finds Plaintiff's motion on these grounds to be appropriate.  As to Plaintiff's request to amend the Complaint regarding its suit against Defendant Carter, Plaintiff argued that the amendment would cure any ministerial or administrative defects related to its alleged failure to clearly indicate the capacity in which Defendant Carter is being sued.  The proposed amendment seeks to clarify the capacity of suit against Defendant Carter by inserting the term "individually" after Defendant Carter's name in the caption. At the hearing, Defendant Carter offered no objection to the proposed amendment, but only in the event Defendant Carter's Motion for Judgment on the Pleadings is denied.

Since the Court has denied Defendants WMLP and Carter's Motion for Judgment on the Pleadings, and these Defendants have failed to present evidence of prejudice in allowing the amendment, Plaintiff's Motion to Amend Complaint IS GRANTED. The Court, however, refers Plaintiff to the case of Gissel, and requires that Plaintiff's caption, allegations in the complaint, and prayer for relief against Defendant Carter be amended in accordance with that case.

IT IS SO ORDERED.

October 3, 2008 
Columbia, SC 
_____________________________
The Honorable J. Michelle Childs