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2004-UP-011 - Baird Pacific West v. Blue Water Sunset Park, Inc

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Baird Pacific West,        Appellant,

v.

Blue Water Sunset Park, Inc.,        Respondent.


Appeal From Beaufort County
John M. Milling, Circuit Court Judge
Perry M. Buckner, Circuit Court Judge
Thomas Kemmerlin, Jr., Special Circuit Court Judge


Unpublished Opinion No.2004-UP-011
Heard December 10, 2003 – Filed January 14, 2004


AFFIRMED


Michael S. Seekings, of Charleston, for Appellant.

Joseph R. Baker, of Hilton Head Island, for Respondent.


PER CURIAM:  Baird Pacific West, Inc. (“Baird”), brought this action against Blue Water Sunset Park, Inc. (“Blue Water”), alleging breach of contract, fraud, and negligent misrepresentation in connection with an agreement entered between the parties for the sale of land.  The circuit court granted summary judgment in favor of Blue Water and  awarded attorney fees to Blue Water.  Baird appeals, arguing (1) summary judgment was improper; and (2) the award of attorney fees was improper because Blue Water failed to request attorney fees in its pleadings and Blue Water’s request for a hearing concerning its motion for attorney fees was untimely, thus divesting the trial court of subject matter jurisdiction.  We affirm.

FACTS

In December 1996, the parties entered into a contract in which Baird agreed to purchase and Blue Water agreed to sell approximately eight acres of waterfront property on the north end of Hilton Head Island.  The agreement set the purchase price at $1,725,000.

The parties were unable to consummate the original contract due to difficulties in obtaining approval from the state environmental agency.   However, this approval was eventually obtained, and in March 1998, Baird and Blue Water entered into an agreement to reinstate and amend the earlier contract.  The parties agreed Baird would have until May 4, 1998 to conduct additional due diligence investigations.  They also agreed that Baird was to waive its right to purchase an extension of the due diligence period, as had been allowed under the terms of the original contract.  Baird could, however, elect to withdraw from the contract at the end of the due diligence period and receive a full refund of its earnest-money deposit.

Prior to the expiration of the new due diligence period, Baird informed Blue Water of three problems Baird was unable to resolve: a title defect, a discrepancy in the acreage of the property, and an instability in some of the filled portions of the land.  Baird requested an extension of the due diligence period in order to resolve these issues, and if Blue Water was not amenable to that request, Baird alternatively suggested they cancel the contract.  Blue Water declined to extend the due diligence review, opting instead to terminate the contract.  The contract was cancelled, and Baird’s earnest money  was refunded.

In March 1999, Baird brought the present action, alleging Blue Water was liable to Baird for breach of contract, fraud, and negligent misrepresentation due to Blue Water’s inability to convey marketable title to the property.  Baird also sought to recover actual and consequential damages. 

Pursuant to Blue Water’s motion for summary judgment, the circuit court concluded there were no genuine issues of material fact and found Blue Water was entitled to judgment as a matter of law on all of Baird’s claims in a June 15, 2001 order, reserving Blue Water’s claim for attorney fees.  The circuit court granted Blue Water “leave to move for an award of attorney fees and Court costs upon thirty (30) days notice to [Baird].”  Following a hearing, the circuit court awarded attorney fees and costs to Blue Water in an October 2001 order.  This appeal follows.

STANDARD OF REVIEW

A trial court should grant a motion for summary judgment when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”  Rule 56(c), SCRCP; see also Fleming v. Rose, 350 S.C. 488, 493, 567 S.E.2d 857, 860 (2002).  “In determining whether any triable issues of fact exist, the evidence and all inferences which can be reasonably drawn from the evidence must be viewed in the light most favorable to the nonmoving party.”  Strother v. Lexington County Recreation Comm’n, 332 S.C. 54, 61, 504 S.E.2d 117, 121 (1998).  If triable issues of fact exist, those issues must go to the jury.  Young v. South Carolina Dep’t of Corr., 333 S.C. 714, 717, 511 S.E.2d 413, 415 (Ct. App. 1999).

LAW/ANALYSIS

I.       Breach of Contract, Fraud, and Negligent Misrepresentation

Baird’s claims for breach of contract, fraud, and negligent misrepresentation all rest upon its assertion that Blue Water was not able to convey marketable title as required by the terms of the contract.  We find no merit to Baird’s position.

In construing the terms of a written contract upon a motion for summary judgment, the question is one of law if the language contained in the contract is plain and unambiguous.  MGC Mgmt. of Charleston, Inc. v. Kinghorn Ins. Agency, 336 S.C. 542, 546, 520 S.E.2d 820, 822 (Ct. App. 1999).  “In such a case, summary judgment is proper and a trial unnecessary where the intention of the parties as to the legal effect of the contract may be gathered from the four corners of the instrument itself.”  First Citizens Bank & Trust Co. v. Conway Nat’l Bank, 282 S.C. 303, 305, 317 S.E.2d 776, 777 (Ct. App. 1984).  It is well settled that, in construing a contract, the court must ascertain and give effect to the intention of the parties.  BP Oil Co. v. Federated Mut. Ins. Co., Inc., 329 S.C. 631, 640, 496 S.E.2d 35, 40 (Ct. App. 1998) (citing D.A. Davis Constr. Co. v. Palmetto Properties, Inc., 281 S.C. 415, 315 S.E.2d 370 (1984)).  When the intention of the parties to a written agreement is at issue, the court must first look to the language of the agreement.  C.A.N. Enterprises, Inc. v. South Carolina Health and Human Servs. Fin. Comm’n, 296 S.C. 373, 377, 373 S.E.2d 584, 586 (1988);  Warner v. Weader, 280 S.C. 81, 83, 311 S.E.2d 78, 79 (1983).  If the agreement is unambiguous, the court must construe it according to the terms the parties chose.  Id.  These terms are to be understood in their ordinary and popular sense.  Id.

With respect to title, the contract in the present case provided:

TITLE. Seller shall convey marketable title to the property to purchaser in fee simple by proper deed in recordable form with stamps affixed and with covenants of general warranty subject to normal utility easements, applicable restrictive covenants, governmental regulations and assessments.  If an owner’s title binder can be issued by an ALTA [1] title insurance company at standard rates with standard exceptions for Hilton Head Island, South Carolina, title shall be deemed to marketable.

(emphasis added).

In compliance with these explicit terms, Blue Water obtained and held at all pertinent times a title binder from the Chicago Title Insurance Company (“Chicago Title”), an ATLA title insurance company.  The policy was issued at standard rates with standard exceptions for Hilton Head Island.  We find these facts uncontroverted by the evidence contained in the record.

However, Baird attempts to redirect the attention of this Court from the plain language of the contract in an effort to convince us Blue Water failed to honor its promise to convey marketable title.  We find these efforts unpersuasive.

For instance, Baird devotes substantial energies to explaining why the title Blue Water was willing to convey would not be “clear” or “marketable” under general principles of real property law.  While this may or may not be true, it is of little concern to the present inquiry.  Where the parties have freely and knowingly entered into a contract – as they did in the present case – our charge is only to give effect to the parties’ intentions as memorialized in the contract language.  We see no reason, and none is alleged, why we should veer from this mandate.

Baird also claims that it could not obtain title insurance with standard rates and exceptions due to the outstanding claims on the title by a third party.  This third party claim, however, was clearly contemplated and fully indemnified under the policy issued by Chicago Title.  This fact is amply demonstrated by a letter received from the insurance company’s underwriting council, which confirms the insurer’s obligation under the policy.  This letter reads, in relevant part:

Since Chicago Title has an outstanding Owner’s Policy, we would be willing to insure over this [third-party claim] problem in the policies for this property.  We would prefer to take exception to the problem and provide affirmative coverage over it rather than issue a “clean policy.”  We prefer to reveal the problem and provide protection. 

However, regardless of the existence or disposition of the alleged cloud on the title of the subject property, the fact remains uncontroverted by the evidence in the record before us that Blue Water was able at all times to provide adequate title insurance under the clear terms of the contract language.

We conclude that Blue Water fully complied with its obligation to convey marketable title to Baird as agreed to by the parties.  Accordingly, Baird’s claims – that Blue Water breached the contract terms regarding title and that Blue Water fraudulently or negligently misrepresented its ability to convey title – are manifestly without merit.  The circuit court correctly granted summary judgment in disposing of Baird’s specious claims.

II.      Attorney Fees

Baird also argues the trial court erred in awarding Blue Water attorney fees.  Specifically, it asserts two procedural defects concerning Blue Water’s request for fees: first, that Blue Water failed to make its request for attorney fees in its pleadings, and, second, that the circuit court lacked subject matter jurisdiction to consider the issue of attorney fees.  We find these arguments unavailing.

          A.      Request of Attorney Fees

We first find that, although Blue Water did not make its request for attorney fees in its pleadings, its claim is not barred under the circumstances of this case.  To be sure, the general rule is that a party is entitled to seek only that relief set forth in its pleadings.  See Premium Inv. Corp. v. Green, 283 S.C. 464, 474, 324 S.E.2d 72, 78 (Ct. App. 1984).  In this case, however, the record reveals Blue Water raised the issue of attorney fees in the affidavit accompanying its October 2000 summary judgment motion.  Subsequently, during the May 2001 hearing on its motion for summary judgment, Blue Water again sought the circuit court’s consideration of the attorney fees issue.  Baird did not object, but rather stated: “I just wanted to make sure that if the court takes up that issue, that I have time to respond to it.”  The circuit court acquiesced to Baird’s request and granted Blue Water leave to move for award of attorney fees upon thirty days notice to Baird.

A hearing on the request for attorney fees was held, during which Baird objected, for the first time, that the claim was barred for failure to plead.  The trial court ruled the request was allowed under Rule 15(b), SCRCP, which allows amendment of the pleadings by express or implied consent of the parties.  See Rule 15(b), SCRCP (stating “[w]hen issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.”)  The decision to allow amendments under Rule 15(b) is entrusted to the sound discretion of the trial judge, and the party opposing the amendment bears the burden of establishing prejudice.  Harvey v. Strickland, 350 S.C. 303, 313, 566 S.E.2d 529, 535 (2002).  We are unable to discern any prejudice to Baird in light of the fact that the issue of attorney fees was raised months earlier.  We find the issue of attorney fees was properly before the circuit court.

B.      Subject Matter Jurisdiction [2]

Baird argues the circuit court lacked jurisdiction to entertain Blue Water’s request for attorney fees.  Specifically, Baird claims that Blue Water failed to seek attorney fees in a timely manner because it did not file a motion within the ten-day time period prescribed by Rule 54, SCRCP.  The rule provides in pertinent part that a “motion for costs, supported by an affidavit that the costs are correct and were necessarily incurred in the action, may be filed by the prevailing party within 10 days of the receipt of written notice of the entry of final judgment.”  Rule 54(d), SCRCP.  Additionally, Rule 54(b), SCRCP, partially provides:

[w]hen more than one claim for relief is presented in an action … the court may direct the entry of a final judgment as to one or more but fewer than all of the claims … upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.  In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all of the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

Here, the circuit court’s order expressly recognized that it reserved the matter of attorney fees for future determination.  Under these circumstances, the circuit court’s continuing jurisdiction was in no manner contingent upon Blue Water filing an additional motion within ten days following the grant of summary judgment.  Moreover, the order granting summary judgment contained no Rule 54(b) “express determination that there is no just reason for delay” of the formal entry of judgment.  Thus, since the matter of attorney fees was reserved, we find that the trial court’s June 15, 2001 order cannot be construed as an order disposing of all claims before the circuit court.  Accordingly, Baird’s reliance on the ten-day filing period provided in Rule 54(d) is misplaced, and the circuit court had subject matter jurisdiction to award attorney fees and costs to Blue Water.

AFFIRMED.

HEARN, C.J., HOWARD and KITTREDGE, JJ., concur.


[1]    American Land Title Association.

[2]   Blue Water argues that the issue of subject matter jurisdiction is not properly before this court because Baird raised it neither in the circuit court nor in its brief.  It is true that, “[a]s a general rule, an issue may not be raised for the first time on appeal.”  McKissick v. J.F. Cleckly & Co., 325 S.C. 327, 343, 479 S.E.2d 67, 75 (Ct. App. 1997).  However, issues related to subject matter jurisdiction may be raised at any time.  Bunkum v. Manor Properties, 321 S.C. 95, 100, 467 S.E.2d 758, 761 (Ct. App. 1996).  Thus, we find that the issue of subject matter jurisdiction is properly before this court.