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2004-UP-348 - Centura Bank v. Cox

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

Centura Bank, Respondent,

v.

Norma J. Cox, Appellant.


Appeal From Florence County
 B. Hicks Harwell, Jr., Circuit Court Judge


Unpublished Opinion No. 2004-UP-348
Submitted May 12, 2004 – Filed May 25, 2004


AFFIRMED


Bradford P. Simpson, B. Randall Dong, and Michael J. Cone, all of Columbia, for Appellant.

Ray Coit Yarborough, Jr., of Florence, for Respondent.

PER CURIAM:  Centura Bank brought this action against Norma J. Cox for judgment on a note secured by real property.  Cox appeals the trial court’s grant of summary judgment to Centura on Cox’s counterclaims (1) that the bank failed to timely obtain her attorney preference as required by statute and (2) that the contract was unconscionable.  We affirm. [1]

BACKGROUND

Cox had an outstanding loan with Centura which was secured by a second mortgage on real estate and, in addition, had several unsecured loans in favor of the bank.  The unsecured loans came due and Cox planned to pay all her debts to Centura from the sale of her real property, which was at that time listed for sale.  Centura offered to renew Cox’s unsecured loans if she consolidated all her debt into a loan secured by the real property and payable in six months.  Cox agreed and because she was temporarily physically disabled from a minor auto accident, a Centura employee took the documents to Cox’s home for her to sign. 

Cox failed to make the payment on the new note on its maturity date.  When Centura commenced this action more than a year after the note matured, Cox responded alleging the contract was unconscionable and obtained in violation South Carolina’s attorney and insurance agent preference statute.  Her real property, valued at $490,000 in the personal financial statement she submitted with her application, was no longer on the market when Cox was deposed.  It remained unlisted throughout the litigation.  Cox explained in her deposition testimony she still intended to sell the property and pay off the note, but wanted to wait until the market would generate a price suitable to her financial needs. 

After a hearing, the trial court granted Centura’s motion for summary judgment on Cox’s counterclaims.

STANDARD OF REVIEW

The purpose of summary judgment is to expedite the disposition of cases that do not require the services of a fact finder.  Dawkins v. Fields, 354 S.C. 58, 69, 580 S.E.2d 433, 438 (2003).  When reviewing the grant of a summary judgment motion, this court applies the same standard that governs the trial court under Rule 56(c), SCRCP: summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.  Fleming v. Rose, 350 S.C. 488, 493, 567 S.E.2d 857, 860 (2002). 

In determining whether any triable issue of fact exists, the evidence and all factual inferences drawn from it must be viewed in a light most favorable to the nonmoving party.  Sauner v. Public Serv. Auth., 354 S.C. 397, 404, 581 S.E.2d 161, 165 (2003).  Even if there is no dispute as to evidentiary facts, but only as to the conclusions to be drawn from them, summary judgment should be denied.  Pye v. Aycock, 325 S.C. 426, 431, 480 S.E.2d 455, 457 (Ct. App. 1997).  Summary judgment is not appropriate when further inquiry into the facts is desirable to clarify the application of law.  Tupper v. Dorchester County, 326 S.C. 318, 325, 487 S.E.2d 187, 191 (1997).

DISCUSSION

I.  The Preference Statute

Cox argues the trial court erred in ruling she failed to establish the attorney and insurance agent preference statute applied and in its alternative finding that Centura satisfied the statute.  We disagree with both contentions.

South Carolina Code section 37-10-102 provides:

Whenever the primary purpose of a loan that is secured in whole or in part by a lien on real estate is for a personal, family or household purpose

(a)     The creditor must ascertain prior to closing the preference of the borrower as to the legal counsel that is employed to represent the debtor in all matters of the transaction relating to the closing of the transaction . . .

The creditor may comply with this section by:

(1)        including the preference information on or with the credit application . . . or

(2)        providing written notice to the borrower of the preference information with the notice being delivered or mailed no later than three business days after the application is received or prepared. 

S.C. Code Ann. § 37-10-102(a) (2002) (emphasis added). 

Cox argues the court erroneously found she presented no evidence the loaned funds were used for a personal, family, or household purpose and thus erred in concluding the statute was not triggered.  Although Cox lived on part of the property she mortgaged, her testimony did not indicate the purpose of the unsecured debt that was restructured.  However, as did the trial court, we assume for the purpose of our analysis that the preference statute applied to this loan and conclude Centura complied with its requirements.

On July 23, 1999, a Centura employee visited Cox at home to prepare her application.  During this visit, the date the application was “received or prepared,” Cox signed several documents, including the credit application and the attorney and insurance agent preference form.  This evidence establishes Centura ascertained Cox’s preference regarding a closing attorney simultaneously with the receipt and preparation of the credit application. 

However, Cox contends a material factual dispute exists regarding the date the application was received and summary judgment was thus inappropriate.  Although she does not dispute signing all of the relevant documents on July 23, Cox asserts this does not prove the date she applied for the loan.  Noting the personal financial statement was dated July 17, Cox argues this indicates Centura provided her with the application before July 23.  Relying on this premise, Cox argues there is a factual question whether Centura failed to provide her with preference information within three days of the application.

We doubt the preference statute requires anything more of a creditor than ascertaining a borrower’s attorney preference prior to closing.  The specific portion of the section Cox references merely describes one way a lender may comply with the statute.  § 37-10-102(a)(2); see Edge v. State Farm Ins. Co., 345 S.C. 136, 139, 546 S.E.2d 647, 648-49 (2001) (concluding when the term “may” is used, it is meant to be merely permissive and not a requirement).  However, even if Cox’s interpretation of the statute is correct, the evidence and factual inferences create no genuine triable issue regarding whether Centura failed to satisfy the statute’s requirements.  On the contrary, the evidence shows she signed the attorney preference form and the credit application on the same day.

II.  Unconscionability

Cox further argues the trial court erred in failing to fully consider the elements of her unconscionability counterclaim.  She claims the contract was one of adhesion, that she was unsophisticated and naïvely believed she could sell the property for $490,000 within six months, and that the sophisticated Centura took advantage of her limited physical mobility knowing she was in no position to negotiate.  Again, we find summary judgment was properly granted.

A trial court may refuse to enforce or limit enforcement of a consumer credit agreement that was unconscionable when it was made.  See S.C. Code Ann. § 37-5-108(1) (2002).  When making this determination, a trial judge is to consider several factors outlined in section 37-5-108(4). [2]   Here, the court specifically referenced these statutory factors before making extensive findings of fact relating to the question.  The court found, among other things, Cox owns real and personal property that could be sold to reduce the debt, Centura reasonably relied on Cox’s assurances she was going to sell the property, the credit contract contains no extraordinary terms, Cox could have easily gone elsewhere to obtain the loan, and Cox specifically noted her auto accident “was not a big thing.”  See S.C. Code Ann. § 37-5-108(1)(b) (“any term or part of the agreement or transaction [was] unconscionable at the time it was made”); § 37-5-108(4)(a) (“belief by the . . . lender at the time a transaction is entered into that there is no reasonable probability of payment”); § 37-5-108(4)(e) (“the fact that the . . . lender has knowingly taken advantage of the inability of the consumer or debtor reasonably to protect his interests by reason of physical or mental infirmities”). 

Unconscionability is the absence of meaningful choice on the part of one party caused by one-sided contract provisions together with terms so oppressive that no reasonable person would make them and no fair and honest person would accept them.  Munoz v. Green Tree Fin. Corp., 343 S.C. 531, 541, 542 S.E.2d 360, 365 (2001).  The trial court, correctly citing the statutory factors and several specific facts related to them, determined the credit contract was neither one-sided nor oppressive.  We conclude the trial court properly considered all relevant elements of Cox’s counterclaim and correctly concluded the credit contract was not unconscionable as a matter of law.

AFFIRMED.

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


[1]         We decide this case without oral argument pursuant to Rule 215, SCACR.

[2]        Subsection 4 has been amended since the trial court issued the order on appeal.