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2004-UP-271 - Hilton Head Resort v. Bergman

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Hilton Head Resort Four Seasons Centre Horizontal Property Regime Council Of Co-Owners, Inc.,        Respondent,

v.

Martin Bergman and Hilton Head Realty Group, Defendants, Of Whom Martin Bergman is,        Appellant.


Appeal From Beaufort County
Daniel E. Martin, Sr., Circuit Court Judge


Unpublished Opinion No. 2004-UP-271
Heard March 10, 2004 – Filed April 20, 2004


AFFIRMED


Michael S. Seekings, of Charleston, for Appellant.

Russell S. Stemke, of Isle of Palms, for Respondent.

PER CURIAM:  The Hilton Head Resort Four Seasons Centre Horizontal Property Regime Council Of Co-Owners (the Regime) filed a complaint against both Hilton Head Realty Group and one of the group’s partners, Martin Bergman.  A subsequent jury trial resulted in a verdict in favor of the Regime in the amount of $1,498,334.36 in actual damages and $375,000 in punitive damages.  Bergman appeals.  We affirm.

FACTS

In late 1989, Martin Bergman and Robert O’Sickey formed Hilton Head Realty Group to purchase a block of condominium units on Hilton Head Island.  In October 1989, Bergman and O’Sickey entered into a contract to purchase 140 condo units, operated by the Regime, from Mellon Bank.  Bergman and O’Sickey each contributed $50,000, which was to be held in escrow by Mellon Bank.  After their original plan for financing fell through, Bergman and O’Sickey approached New York attorneys Mark Birnbaum and Kenneth Wurman about joining their venture and providing additional capital. 

Bergman, O’Sickey, and Hilton Head Realty as one party and Birnbaum and Wurman as the other party entered into a Joint Venture Agreement on February 13, 1990.  The joint venture was formed to purchase twenty condo units every thirty days until all the units were closed.  The name of the joint venture was to be RICO, Inc.  On February 21, 1990, RICO, Inc. was incorporated as a South Carolina Corporation.   

Birnbaum and Wurman arranged for Strom Trust, a client of theirs for which Birnbaum served as trustee, to provide financing for the first purchase of condominiums.  In a document dated February 21, 1990, Strom Trust and Hilton Head Realty agreed Strom Trust would advance $400,000 for the purchase of the first twenty units provided for in the agreement with Mellon Bank. 

The condominiums did not sell as quickly as expected.  Bergman found a buyer for the second set of units who took title to the units immediately after the transfer from Mellon Bank to RICO in March 1990.  Bergman testified that after that transaction, he told the other members of RICO that he did not want any further involvement with the venture.  To that end, Bergman did not make any contribution to the purchase of the third group of twenty units.  However, he continued writing checks from the RICO account, including making payments on the loans he and O’Sickey obtained to fund the escrow with Mellon Bank.  On July 27, 1990, RICO secured a $200,000 loan from Stark Leasing, another client of Birnbaum and Wurmer, for the purchase of the third set of condominiums. 

In October 1990, the Regime filed a lien for unpaid assessments on the thirty-five units owned by RICO.  On February 22, 1991, the Regime filed a summons and complaint to foreclose on the units.  Approximately one year later, on February 25, 1992, the master filed an order granting the Regime a judgment against RICO in the amount of $158,066.28 and ordering the sale of the units. 

The day after the decree of foreclosure was filed, Strom Trust and Stark Leasing each filed to foreclose on their mortgages with RICO, naming the Regime as a party.  The Regime answered and filed a cross-claim against RICO.  In May of 1992, the circuit court granted Strom Trust and Stark Leasing judgments of foreclosure of the mortgages.  The Regime filed motions to vacate the foreclosure judgment, challenging the relative priority of the mortgages and otherwise challenging the validity of the claims of the mortgage holders.  On June 29, 1992, RICO filed for voluntary bankruptcy under Chapter 11 of the United States Bankruptcy Code.  The circuit court subsequently entered an order vacating the foreclosure judgments of Strom Trust and Stark Leasing and declaring the Regime had a first priority. 

In May 1995, RICO, Strom Trust, Stark Leasing, Wurman, Birnbaum, and the Regime agreed to settle.  As part of this settlement, Strom Trust and Stark Leasing combined to form StarkStrom, which would own all of RICO’s assets, including the remaining twenty-eight condo units in the Regime.  StarkStrom also agreed to issue a note and first mortgage to the Regime for $230,000.  There would be no interest calculated on this amount as long as StarkStrom did not default and made three payments of $76,667 on June 1, 1996, June 1, 1997, and December 31, 1997. [1]   In the Agreement, the Regime reserved the claims it believed it had against Bergman and O’Sickey. 

In September of 1995, the Regime filed an amended answer and cross-claim against Hilton Head Realty, Bergman, and O’Sickey alleging various causes of action, including:  violation of the Unfair Trade Practices Act, [2] civil conspiracy, Statute of Elizabeth [3] claims, piercing the corporate veil, and liability under the doctrine of joint enterprise.  The master-in-equity issued an order consolidating all these actions and realigning the parties. [4]   In response to Bergman’s motion for a jury trial, the master ruled that the equitable causes of action, including piercing the corporate veil, would not be tried by the jury.  The master then transferred the remaining issues to the jury roster in circuit court.

The case against Bergman was tried in front of a jury from April 30, 2001 to May 4, 2001. [5]   After the Regime rested its case, the trial court granted Bergman’s directed verdict motion as to the Unfair Trade Practices Act cause of action but denied the directed verdict motions as to civil conspiracy and joint venture.  In addition, the court allowed the Regime to amend its complaint to include a cause of action for negligence. 

At the close of trial, but before closing arguments, Bergman made a motion “for a directed verdict based on [his] argument made at the close of [the Regime]’s case.”  This motion was denied.  Therefore, the jury considered the following causes of action:  negligence, civil conspiracy, and liability under the doctrine of joint enterprise.  The jury returned a verdict for the Regime in the amount of $1,498,334.36 in actual damages and $375,000 in punitive damages.  Bergman filed a motion for judgment notwithstanding the verdict (JNOV), or, in the alternative, a motion for a new trial absolute or a new trial nisi remittitur.  The trial court denied these motions.  This appeal followed. 

LAW/ANALYSIS

I.          Motion to Amend the Pleadings

Bergman argues the trial court erred in allowing the Regime to amend its pleadings to add a cause of action for negligence. 

After the trial court denied Bergman’s motions for directed verdict, the Regime moved to amend the pleadings to include a cause of action for negligence.  Bergman’s attorney responded:

Your Honor, I would oppose such an amendment.  We have prepared our defense which include[s] the cross examination of the plaintiff’s witness and at this late stage an (sic) new cause of action really added is inappropriate.  And I realize there is a rule allowing the plaintiff in some circumstances to amend to conform for the pleadings but I don’t think it’s appropriate here. 

The trial court agreed to allow the amendment, but did not state any grounds for its ruling. 

The South Carolina Rules of Civil Procedure provide for the amendment of pleadings:

When 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.  Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues.  If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits.  The court shall upon motion grant a continuance reasonably necessary to enable the objecting party to meet such evidence.  Upon allowing any such amendment or evidence the Court shall state in the record the reason or reasons for allowing the amendment or evidence.  In the event the Court should try issues not raised by the pleadings, it shall state in the record all such issues tried and the reason therefor.

Rule 15(b), SCRCP.

“Motions to amend pleadings to conform to proof may be made upon motion of any party at any time, even after judgment . . . .”  Ball v. Canadian Am. Express Co., 314 S.C. 272, 275, 442 S.E.2d 620, 622 (Ct. App. 1994).    Generally, amendments to conform to proof should be liberally allowed.  Pool v. Pool, 329 S.C. 324, 328, 494 S.E.2d 820, 822 (1998).   “It is well established that a motion to amend is addressed to the sound discretion of the trial judge, and that the party opposing the motion has the burden of establishing prejudice.”  Foggie v. CSX Transp., Inc., 315 S.C. 17, 23, 431 S.E.2d 587, 590 (1993).  “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.”  Pool, 329 S.C. at 328-29, 494 S.E.2d at 823.  If late amendment of the pleadings would cause prejudice to the opposing party, the court should either deny the amendment or grant a continuance reasonably necessary to allow the opposing party to meet the amendment.  Ball, 314 S.C. at 275, 442 S.E.2d at 622.

Bergman only opposed the amendment due to the lateness of the motion rather than the sufficiency of evidence to support a cause of action for negligence.  That the motion to amend came after the Regime rested its case does not prevent the trial judge from granting such an amendment.  “Simply because an amendment to conform to proof was made late in the trial affords no basis for holding that the amendment comes too late. . . .  [T]he question is one of prejudice to the opposing party.”  Soil & Material Eng’rs, Inc. v. Folly Assocs., 293 S.C. 498, 501, 361 S.E.2d 779, 781 (Ct. App. 1987). 

On appeal, Bergman argues he was prejudiced because he “had absolutely no opportunity to present any evidence as to the duties and responsibilities of a corporate officer, had no opportunity to present any experts to discuss duties and responsibilities of corporate officers, and had no opportunity to show that [his] actions fell within the established standard of care.”  Bergman failed to raise these arguments as grounds for his opposition to the motion to amend at the time of the amendment.  Accordingly, these arguments are not properly before this court.  See Glover v. North Carolina Mut. Life Ins. Co., 295 S.C. 251, 257, 368 S.E.2d 68, 72 (Ct. App. 1988) (stating this court will not reverse a trial court’s ruling on a motion on a basis not presented to the trial court). 

At the time of the motion to amend, Bergman only asserted that he would be prejudiced by the amendment because his preparation of his defense, including the cross-examination of the Regime’s witnesses would have been different.  We find Bergman has failed to demonstrate sufficient prejudice for this court to reverse the trial court’s allowance of the amendment.  One of the Regime’s primary witnesses during its case was Bergman himself, who testified again during his own case after the amendment.  Furthermore, at the time of the amendment, Bergman did not move for a continuance as is allowed by Rule 15(b), SCRCP.  As Bergman did not take steps to secure more time in which to prepare a defense for the new negligence cause of action, we cannot conclude the trial court abused its discretion in finding Bergman was not so prejudiced as to mandate denying the amendment.

Bergman asserts the trial court erred in failing to state for the record its reasons for allowing the amendment as required by Rule 15 (b), SCRCP.  As Bergman failed to object to this omission, the issue is not preserved for our review.  Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) (stating that it is axiomatic that an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the trial judge to be preserved for appellate review).  Similarly, Bergman failed to request the court require the Regime to set forth evidence to support its motion.  He cannot complain about the ambiguity of the motion on appeal.  See id.  Bergman’s inclusion of these arguments in his post-trial motions does not preserve them for appeal.  See Patterson v. Reid, 318 S.C. 183, 185, 456 S.E.2d 436, 437 (Ct.App.1995) (“A party cannot for the first time raise an issue by way of a Rule 59(e) motion which could have been raised at trial.”).

Accordingly, we affirm the trial court’s grant of the motion to amend the pleadings to include a cause of action for negligence.  As Bergman does not challenge the sufficiency of the evidence to support the cause of action for negligence, we must affirm the jury’s verdict in favor of the Regime on this issue. 

II.      Civil Conspiracy and Joint Venture Causes of Action         

Bergman argues the trial court judge erred in denying his motion for  judgment notwithstanding the verdict (JNOV) as to the civil conspiracy cause of action.  Bergman also argues the trial court judge erred in denying his motions for JNOV and a new trial absolute as to his liability under the doctrine of joint venture.  We do not need to reach these arguments under the two-issue rule. 

“Under the ‘two issue’ rule, when the jury returns a general verdict involving two or more issues and its verdict is supported as to at least one issue, the verdict will not be reversed on appeal.”  Anderson v. South Carolina Dep't of Highways & Pub. Transp., 322 S.C. 417, 419, 472 S.E.2d 253, 254 (1996). The supreme court in Anderson illustrated the “two issue rule” as follows:

[The] two applications of the “two issue” rule are illustrated in the following example:  A case is submitted to the jury on the issues of defamation and invasion of privacy.  The jury returns a general verdict for the plaintiff.  The defendant appeals, arguing that the trial court erred by failing to direct a verdict on the defamation issue.  Under one application of the “two issue” rule, an appellate court would affirm because defendant has failed to appeal the invasion of privacy issue as well.  Assuming, however, that the defendant has appealed both issues, the appellate court would affirm on the basis of a second application of the “two issue” rule, if either of the two issues supported affirmance. 

Id. at 420, 472 S.E.2d at 254. 

Thus, under this second application of the “two issue” rule, we find it unnecessary to address the issues of civil conspiracy and liability under the joint venture doctrine as our ruling on the negligence issue requires affirmance of the jury’s general verdict.  

III.       Motions for a new trial nisi remittitur or absolute. 

Bergman argues the trial court judge erred in denying his motion for a new trial nisi remittitur or new trial absolute.  We disagree.

The trial court alone has the power to grant a new trial nisi when it finds the amount of the verdict to be merely inadequate or excessive.  O’Neal v. Bowles, 314 S.C. 525, 527, 431 S.E.2d 555, 556 (1993). The denial of a motion for a new trial nisi is within the trial court’s discretion and will not be reversed on appeal absent an abuse of discretion.  Id.  On appeal of the denial of a motion for a new trial nisi, the appellate courts will reverse only when the verdict is grossly inadequate or excessive requiring the granting of a new trial absolute.  Id. 

The trial court’s decision to deny a motion for new trial absolute is within its discretion and will not be reversed absent an abuse of discretion.  Cock-N-Bull Steak House, Inc. v. Generali Ins. Co., 321 S.C. 1, 9, 466 S.E.2d 727, 731 (1996).  When reviewing the denial of a motion for new trial, the court must look at the testimony and inferences raised therefrom in the light most favorable to the nonmoving party.  Welch v. Epstein, 342 S.C. 279, 302-03, 536 S.E.2d 408, 420 (Ct. App. 2000).  “The trial court must set aside a verdict only when it is shockingly disproportionate to the injuries suffered and thus indicates that passion, caprice, prejudice, or other considerations not reflected by the evidence affected the amount awarded.”  Id. at 302, 536 S.E.2d at 420.  A jury’s determination of damages is entitled to substantial deference by this court.  Knoke v. S.C. Dep’t. of Parks, Recreation & Tourism, 324 S.C. 136, 141, 478 S.E.2d 256, 258 (1996). 

In support of his argument that the jury’s verdict was excessive, Bergman raises four issues.  We find these issues are not properly before this court.  Bergman asserts the Regime failed to mitigate its damages by selling the foreclosed units and that it waived its right to collect the debt from Bergman individually by waiving its right to collect from RICO.  We find no indication in the record that Bergman presented these issues to the jury.  See McClary v. Massey Ferguson, Inc., 291 S.C. 506, 511, 354 S.E.2d 405, 408 (Ct. App. 1987) (stating whether the party acted reasonably to mitigate damages is ordinarily a question for the jury); Stovall Bldg. Supplies, Inc. v. Mottett, 305 S.C. 28, 35, 406 S.E.2d 176, 180 (Ct. App. 1990) (stating the question of waiver is a matter for the jury or fact finder).  Bergman also argues that the regime fees assessed against RICO after the order of foreclosure should be stricken from the damages award.  Bergman, however, failed to object when the Regime introduced these damages into evidence.  See Jackson v. Speed, 326 S.C. 289, 307, 486 S.E.2d 750, 759 (1997) (a party who fails to object to the admission of evidence when it is offered cannot make its admission a ground for appeal).  

Finally, Bergman argues that because the Regime’s settlement with StarkStrom impaired the collateral that secured the debt, the Regime should be barred from seeking an alternative recovery against Appellant.  Our review of the record, however, reveals Bergman failed to raise this or any of the other above arguments until his motion for a new trial.  See Patterson v. Reid, 318 S.C. 183, 185, 456 S.E.2d 436, 437 (Ct.App.1995) (“A party cannot for the first time raise an issue by way of a Rule 59(e) motion which could have been raised at trial.”).  Accordingly none of these issues are preserved for our review.  

Viewing the evidence in the light most favorable to the nonmoving party, the Regime, we find the trial court did not err in denying Bergman’s motion for a new trial.  In the order denying Bergman’s post-trial motions, the court found the jury’s award of damages was not unreasonable.  The court based this determination on the fact that the jury awarded $1,498,334.36 in actual damages and the Regime had submitted an exhibit at trial in which it itemized damages totaling $1,498,334.36.  After Bergman waived a procedural objection, this exhibit was admitted into evidence without objection.  The trial court found Bergman had not presented any evidence that the jury was “controlled by corruption, prejudice, passion or caprice.”  We agree with the trial judge’s findings and find there was no abuse of discretion in denying the new trial motion.  There was sufficient evidence in the record to support the jury’s verdict – down to the penny – and Bergman failed to show the jury’s verdict resulted from any kind of improper motive.  Accordingly, we conclude the trial court judge did not err in denying Bergman’s motions for a new trial nisi remittitur or absolute.

CONCLUSION

Based upon the foregoing, the trial court judge’s findings are

AFFIRMED.

HUFF, STILWELL, and CURETON, JJ., concur. 


[1] StarkStrom made the first payment on June 1, 1996; however, the parties agreed to restructure the next two payments and pay the amounts in increments until the full amount was paid. 

[2] S.C. Code Ann. §§ 39-5-10 et seq. (1985 & Supp. 2003).

[3] S.C. Code Ann. § 27-23-10 (Supp. 2003).

[4] As a result of this realignment, the parties were arranged in the same manner as is currently before this court.

[5] The Regime settled its claims against O’Sickey prior to trial.