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25168 - Wachovia Bank of S.C. v. Player
Wachovia Bank of S.C. v. Player


Shearouse Adv. Sh. No.
S.E. 2d


THE STATE OF SOUTH CAROLINA

In The Supreme Court



Wachovia Bank of South

Carolina, N.A., successor

by merger of South

Carolina National Bank, Respondent,



v.



Jay H. Player and

Institution Food House,

Inc., of whom Jay H.

Player is Petitioner.



ON WRIT OF CERTIORARI TO THE COURT OF

APPEALS



Appeal From Georgetown County

Benjamin H. Culbertson, Master in Equity



Opinion No. 25168

Heard June 7, 2000 - Filed July 7, 2000



REVERSED IN PART AND AFFIRMED



Gilbert Scott Bagnell, of Columbia, for petitioner.



Warren R. Herndon, of Woodward, Cothran & Herndon,

of Columbia, for respondent.



p.394


Wachovia Bank v. Player





JUSTICE PLEICONES: We granted certiorari to review a

decision of the Court of Appeals holding that the master-in-equity lacked

subject matter jurisdiction to consider petitioner's Rule 60(b)(4), SCRCP,

motion. Wachovia Bank of South Carolina N.A. v Player, 334 S.C. 200, 512

S.E.2d 129 (Ct. App. 1999). We reverse this holding, address the appeal on

the merits, and affirm the master's order.







Respondent (Bank) brought this foreclosure action against petitioner,

who defaulted. The case was referred to the master with finality, and with

authority to directly appeal to this Court. 1 On June 9, 1997, the master

issued the foreclosure order and on June 20, 1997, petitioner moved to set it

aside under Rule 60(b)(4) on the ground that the court lacked personal

jurisdiction over him because service had been improper. The motion was

denied following a hearing and petitioner appealed.







The Court of Appeals sua sponte ordered petitioner to address the

master's jurisdiction to entertain the Rule 60(b)(4) motion, and ultimately

dismissed the appeal, finding the master lacked subject matter jurisdiction.

Wachovia Bank, supra. We granted certiorari, and now reverse.







The order of reference specifically stated that the master was "to take

the testimony arising under the pleadings and to make his findings of fact and

conclusions of law with authority to enter a final judgment in the case . . . .

provided further that pursuant to S.C. Code [sic] Section 15-39-680 (1986),

that the Master-in-Equity is hereby authorized to conduct the public sale at

any specified time. . ." The "Master's Report and Judgment of Foreclosure

and Sale" which was filed June 9, set the sale for a future date and retained

jurisdiction to do all necessary acts incident to the foreclosure.







The Court of Appeals cited from the order of reference, and held that

once the master ordered foreclosure, "he had exercised the full extent of the

power he possessed, i.e., he had entered a final judgment." Wachovia Bank of

South Carolina v. Player, supra. The Court of Appeals concluded the master's

powers after entry of the foreclosure judgment were limited to : (1) matters

pertaining to the sale, see Rule 71, SCRCP; (2) to post-trial motions under

Rules 52, 59, or 60(a), SCRCP; and (3) if an appeal were taken, to setting an



p.395


1 This reference occurred prior to the 1999 amendment of Rule 53,

SCRCP, and the 1999 amendment of S.C. Code Ann. §14-11-85 which altered

the practice of referring matters. Therefore, this order included the "finality"

and "direct appeal" provisions.



p.396


Wachovia Bank v. Player





appeal bond or entertaining a supersedeas motion. Id. We disagree.







The proper construction of the order of reference is that it gives the

master jurisdiction over the case and all matters arising from it until the

master has performed all the duties assigned to him. In this case, those duties

included conducting the sale and disposing of the surplus fund. See Rule

71(c), SCRCP. Once the master has concluded his duties and entered all

necessary orders, his jurisdiction ends and any post-trial motions, other than

those covered by this Court's May 22, 1986, order, 2 are to be heard by the

circuit court. The language in the order of reference authorizing the master to

enter a final judgment is not a limitation on his jurisdiction, but rather is

descriptive of the nature of his order. Under the rules in effect at the time of

the reference, had the order not authorized a final judgment, the master

would have issued a report to the circuit court, which in turn would have

entered the final order. See pre-1999 versions of Rule 53, SCRCP and § 14-11

85. 3







Moreover, it makes common sense to permit the judge in whose court

the matter is pending to decide the merits of any Rule 60 motion. Otherwise,

if the circuit court were to hear this 60(b)(4) motion, it is conceivable that it

would set aside service while at the same time the master was proceeding

with the sale. Compare Hudson v. South Carolina Dep't of Highways and

Public Transp., 324 S.C. 245, 478 S.E.2d 839 (1996) (leave of appellate court is

required when Rule 60(b) motion is sought to be filed during the pendency of

an appeal because the "appellate court should not needlessly expend its

limited time and resources processing and deciding an appeal from an order of

judgment which has been set aside").







Here, the master had not concluded his duties under the order of

reference when this Rule 60(b)(4) motion was filed, and therefore he had

jurisdiction to decide the motion. 4 We reverse the decision of the Court of




2 Pursuant to this order, a post-trial motion filed under Rules 50, 52, 59

or 60(a), SCRCP, is to be delivered to the trial judge, who is then to dispose of

it promptly.







3 Under the 1999 changes, all matters will be referred with finality. S.C.

Code Ann. § 14-11-85 (Supp. 19'99); Rule 53, SCRCP.







4 cf., Shillito v. City of Spartanburg, 215 S.C. 83, 54 S.E.2d 521

(1949)(generally, trial judge loses jurisdiction over a case finally determined

when he adjourns sine die).



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Wachovia Bank v. Player





Appeals holding the master lacked jurisdiction. Further, in the interest of

judicial economy, we address the merits of petitioner's appeal now.







Petitioner's 60(b)(4) motion was predicated on his claim that substituted

service by publication was improper, and thus the court did not have personal

jurisdiction over him. Petitioner claims the process server did not exercise

"actual" due diligence because if she had, she would have easily found him.

He also points out that the petition for an order of publication contains an

untrue statement, i.e., it asserts that the "Sheriff for Georgetown County did

attempt service upon said defendant. . ." In fact, service was only attempted

by a private process server. It is clear from reading the two documents

together that the petition is inaccurate, but that the process server's affidavit

reflects due diligence by her.







Following an evidentiary hearing on petitioner's motion, the master

issued an order refusing to set aside service of process. He found petitioner

failed to present any evidence of fraud or collusion in obtaining the order for

service by publication.







An order for service by publication may be issued pursuant to S.C., Code

Ann. § 15-9-710 (Supp. 1999) when an affidavit, satisfactory to the issuing

officer, is made stating that the defendant, a resident of the state, cannot,

after the exercise of due diligence, be found, and that a cause of action exists

against him. § 15-9-710(3). When the issuing officer is satisfied by the

affidavit, his decision to order service by publication is final absent fraud or

collusion. Yarborough v. Collins, 293 S.C. 290, 360 S.E.2d 300 (1987); Ingle v.

Whitlock, 282 S.C. 391, 318 S.E.2d 367 (1984); Gibson v. Everett, 41 S.C. 22,

19 S.E. 286 (1894); Yates v. Gridley, 16 S.C. 496 (1882). Since there were

neither allegations nor proof of fraud or collusion before the master, 5 he

correctly refused to set aside service.







Petitioner also appears to, argue that the Court should draw a




5 In his brief before the Court, petitioner alleges the "material

misrepresentations" in the Bank's petition for an order of publication were

fraudulent. In his motion, and at the 60(b)(4) hearing before the master,

however, there were no allegations of fraud or collusion, and the emphasis

was on the alleged lack of due diligence by the process server. If petitioner

wished to assert fraud or collusion, the burden of presenting such evidence,

e.g., through the testimony of the clerk who ordered the publication or of the

process server, fell to him.



p.398


Wachovia Bank v. Player





distinction between "direct" attacks on service such as his, and other

"collateral" attacks. We know of no basis for characterizing this 60(b)(4)

motion as "direct" rather than "collateral." In addition, to the extent

petitioner relies on Ingle v. Whitlock, 282 S.C. 391, 318 S.E.2d 367 (1984), for

the proposition that the Court does review the sufficiency of due diligence, he

is misreading the opinion. In that opinion, the Court first recited the

allegations in the affidavit, but then cited Yates v. Gridley, supra, for the

proposition that the sufficiency of the due diligence allegations is a matter for

the officer reviewing the affidavit. There is no "direct/collateral" distinction,

nor any support for petitioner's request that this Court review the merits of

the due diligence issue.









Finally, there is some suggestion in petitioner's brief that the master's

refusal to review his due diligence claim on its merits deprived him of due

process. This issue was never raised to the master, and cannot properly be

raised now. Beaufort County v. Butler, 316 S.C. 465, 451 S.E.2d 386

(1994)(constitutional claims must be raised and ruled upon below to be

preserved for appeal). In any case, we perceive no constitutional problem

here.







For the reasons given above, we reverse the decision of the Court of

Appeals, and affirm the master's order refusing to grant petitioner relief

under Rule 60(b)(4).







Reversed in part and Affirmed.



Toal, C.J., Moore, J., Acting Justices Ernest A. Finney, Jr., and

Gary E. Clary, concur.



p.399