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
In The Court of Appeals
Steve W. McConnell, Appellant,
John Burry, Rabon Creek Watershed Conservation District of Fountain Inn, South Carolina, T.H. Walker, Jr., Defendants,
Of whom John Burry is, Respondent.
Henry F. Floyd, Circuit Court Judge
Unpublished Opinion No. 2006-UP-320
Heard December 6, 2005 – Filed August 18, 2006
AFFIRMED IN PART; REVERSED IN PART
H.W. Pat Paschal, Jr., of
Greenville, for Appellant.
W. Francis Marion, Jr., of
Greenville, for Respondent.
PER CURIAM: Steven McConnell appeals the trial court’s order granting John Burry summary judgment on McConnell’s causes of action for fraud, constructive fraud, negligent misrepresentation, negligent/reckless nondisclosure of land defects, fraudulent concealment, violation of the South Carolina Unfair Trade Practices Act, and negligence arising from a real estate transaction. We affirm in part and reverse in part.
In August of 1976, Burry acquired 172 acres of land in Laurens and
After construction of a dam and a lake (
On August 21, 1990, Burry sold lot 14 to E.J. and Gail Neal by warranty deed. About two years later, McConnell became interested in property surrounding
On August 26, 1995, McConnell’s property was flooded as the waters of
In his complaint filed December 8, 1995, McConnell asserted claims against Burry, Rabon Creek, and other defendants alleging various causes of action arising out of the damage to his property and inability to rebuild. McConnell alleged Burry’s failure to disclose the existence of a flood plain on the subject property gives rise to claims against Burry for fraud, constructive fraud, negligent misrepresentation, negligent/reckless nondisclosure of land defects, fraudulent concealment, breach of fiduciary duty, violation of the South Carolina Unfair Trade Practices Act (SCUTPA), negligence, breach of warranty of merchantability, breach of warranty of fitness, breach of express warranty, and breach of contract. McConnell also sought an injunction requiring Burry to protect against the damages resulting from the Rabon Creek easement. McConnell’s lawsuit was consolidated with similar individual actions by his neighbors.
In 1997, the trial court granted partial summary judgment as to the existence of the easement as initially executed and filed. After a bench trial, the court found in favor of McConnell and his neighbors. On appeal, this court held that the easement was clear and unambiguous, allowing Rabon Creek to flood the land surrounding the lake up to the top of the dam (an elevation of 724.5 feet), and the Homeowners possessed actual or constructive notice of the easement. Binkley v. Rabon Creek Watershed Conserv. Dist. of Fountain Inn, 348 S.C. 58, 558 S.E.2d 902 (Ct. App. 2001), cert. denied (Oct. 23, 2002).
On remand, the trial court granted summary judgment to Burry on all of McConnell’s causes of action on the merits and found McConnell’s claims were barred by the statute of limitations. The court subsequently denied McConnell’s motion to alter or amend the judgment. This appeal followed.
STANDARD OF REVIEW
To obtain summary judgment, the moving party must demonstrate there is “no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law.”
I. Fraud, Constructive Fraud, Negligent Misrepresentation, and Negligence
McConnell argues the trial court erred in granting summary judgment on his causes of action for fraud, constructive fraud, negligent misrepresentation, and negligence. We agree.
To prove an action for fraud, the plaintiff must establish the following elements:
1) a representation; 2) its falsity; 3) its materiality; 4) knowledge of its falsity or a reckless disregard of its truth or falsity; 5) intent that the representation be acted upon; 6) the hearer’s ignorance of its falsity; 7) the hearer’s reliance on its truth; 8) the hearer’s right to rely thereon; and 9) the hearer’s consequent and proximate injury. Failure to prove any one of these elements is fatal.
Florentine Corp. v. PEDA I, Inc., 287 S.C. 382, 385-86, 339 S.E.2d 112, 113-14 (1985)(citations omitted).
To establish constructive fraud, the plaintiff must establish all of the elements of actual fraud except the element of intent. Ardis v. Cox, 314 S.C. 512, 516, 431 S.E.2d 267, 269 (Ct. App. 1993).
The plaintiff must establish the following elements to establish liability for negligent misrepresentation:
1) the defendant made a false representation to the plaintiff; 2) the defendant had a pecuniary interest in making the representation; 3) the defendant owed a duty of care to see that he communicated truthful information to the plaintiff; 4) the defendant breached that duty by failing to exercise due care; 5) the plaintiff justifiably relied on the representation; and 6) the plaintiff suffered a pecuniary loss as the proximate result of his reliance upon the representation.
Sauner v. Pub. Serv. Auth. of
Finally, for a negligence claim, the plaintiff must establish: 1) a duty of care owed by the defendant to the plaintiff; 2) a breach of that duty by a negligent act or omission; and 3) damage proximately resulting from the breach of duty. Rickborn v. Liberty Life Ins. Co., 321 S.C. 291, 300, 468 S.E.2d 292, 298 (1996).
A non-disclosure becomes fraudulent concealment when it is the duty of the party having knowledge of the facts to make them known to the other party to the transaction. Lawson v. Citizens & S. Nat’l Bank of S.C., 259 S.C. 477, 481-82, 193 S.E.2d 124, 126 (1972). The seller of real property has a duty to disclose material facts to the purchaser “[w]here material facts are accessible to the [seller] only and he knows them not to be within the reach of the diligent attention, observation and judgment of the purchaser.” Lawson, 259 S.C. at 485, 193 S.E.2d at 128.
The right to rely must be determined in light of the plaintiff’s duty to use reasonable prudence and diligence under the circumstances in identifying the truth with respect to the representations made to him. Florentine Corp., 287 S.C. at 386, 339 S.E.2d at 114. One who has knowledge of the truth or the means by which he could acquire such knowledge with reasonable diligence cannot claim to have been misled. Binkley v. Rabon Creek Watershed Conserv. Dist. of Fountain Inn, 348 S.C. 58, 71, 558 S.E.2d 902, 908 (Ct. App. 2001), cert. denied (Oct. 23, 2002). The determination of what constitutes reasonable diligence and prudence must be made on a case by case basis.
Slack v. James, 364 S.C. 609, 615, 614 S.E.2d 636, 639 (2005). As a general rule, questions concerning reliance and its reasonableness are factual questions for the jury.
This court recently affirmed the trial court’s grant of summary judgment on similar claims by McConnell’s neighbors, John and Janice LoPresti against Burry. LoPresti v. Burry, 364 S.C. 271, 612 S.E.2d 730 (Ct. App. 2005). The trial court dismissed the Loprestis’ claims based on a finding that they were charged with constructive notice of the flood easement. This court found nothing in the record to support the Loprestis’ argument that they justifiably relied on the absence in the plat of the dotted lines showing the flood plain. We found no evidence suggesting the altered plat induced the LoPrestis not to make a complete review of the public records or request a detailed survey of the property before purchasing. We considered the LoPrestis’ argument that the trial court erred in finding Burry was not required to disclose the flood easement and other arguments and concluded, “The fact that the LoPrestis had constructive notice of the easement and the absence of any special relationship between the LoPrestis and . . . Burry . . . that would require disclosure of a matter of public record are dispositive of these arguments.” LoPresti, 364 S.C. at 278, 612 S.E.2d at 733-34.
It is undisputed McConnell, like the LoPrestis, had constructive notice of the flood easement. See Binkley, 348 S.C. at 68, 558 S.E.2d at 907 (ruling McConnell and neighbors had actual or constructive notice of the flood easement). However, on appeal McConnell’s claims against Burry are not based on concealment of the easement, but rather concealment of the flood plain line and McConnell’s inability to rebuild his home. This flood plain line constitutes a separate and distinct legal barrier to McConnell’s ability to rebuild. Pat Webb with the Greenville County Building Authority testified that in order for McConnell to receive a building permit, the living area, all live mechanical systems including ductwork, and all live electrical systems in the house would have to be two feet above the hundred-year flood line.
Burry had a legal duty to disclose the location of the hundred year flood line. Webb testified the county’s Floodplain Management Regulations require developers to calculate base flood elevation data and provide that information to the county. She explained that if Burry had received information from his surveyor that the property that was being subdivided was in a special flood hazard area, Burry would have been required to submit base flood elevation data to the county.
A false representation made to the public in general may form the basis for liability for an individual. 37 Am.Jur.2d Fraud and Deceit § 111 (2001). “[O]ne who intends to defraud the public or a particular class of persons is deemed to have intended to defraud every individual in that class who is actually misled.”
As Burry had a duty to disclose the existence of the flood line on McConnell’s property, this case hinges on whether McConnell had a right to rely on any representation made by Burry. We find there is conflicting evidence on whether through the use of reasonable diligence McConnell could have discovered the flood line. The record includes evidence of several warning signs that a jury could consider to have put McConnell on notice to make further investigations. Not only was McConnell’s property next to a lake, but also, a duly recorded, unambiguous flood easement encumbered McConnell’s property. In addition, a real estate appraisal obtained April 22, 1994, informed McConnell the appraisers were “unable to determine exact location of [property] on attached flood map” but “believed . . . that at least the rear portion of the lot is in a flood zone due to the adjacent lake.”
However, McConnell received assurances his house was not in the flood plain. In May 1994, McConnell rolled a construction loan into a mortgage and was given a “Notice to Borrower of Special Flood Hazard Area” by NationsBank. The bank informed McConnell the flood hazard insurance requirement would be waived if a survey indicated no flood hazard existed and/or insurance covered any flood hazard. McConnell hired surveyor John Montgomery to perform a survey in December 1994.
Viewing the evidence in the light most favorable to McConnell, we hold a jury could reasonably conclude McConnell was justified in relying on Burry’s failure to disclose the existence of the flood plain line, either on the plat or by filing the information with the County. Accordingly, we find the trial court erred in granting summary judgment on the claims of fraud, constructive fraud, negligent misrepresentation, and negligence.
II. Negligent/Reckless Nondisclosure of Land Defect
McConnell argues the trial court erred in finding that his negligent representation claim for land defects should be dismissed because of a failure to show that McConnell showed “bodily harm,” the error being that there is no bodily harm requirement. He asserts, “
III. South Carolina Unfair Trade Practices Act
McConnell asserts Burry’s alleged misrepresentations violate the South Carolina Unfair Trade Practices Act (SCUTPA). We disagree.
In Reynolds v. Ryland Group, Inc., 340 S.C. 331, 335, 531 S.E.2d 917, 919 (2000), the supreme court considered the certified question: “Under South Carolina law, can Plaintiffs in a residential construction defects case sue Defendant builder, seller and developer under the South Carolina Unfair Trade Practices Act if Plaintiffs did not purchase their residences from Defendant but from the original homeowner more than three years after the initial sale?”
Although there is no specific provision within SCUPTA which limits a cause of action to an immediate purchaser, we answer the certified question in the negative. We realize that suing under SCUPTA can be a very attractive remedy because the statute provides that if the deceptive act is willful, then the plaintiff may recover treble damages. However, subsequent purchasers are not without remedies. The courts and legislature have paved the way to allow subsequent purchasers to bring causes of actions in tort, negligence and implied warranties.
As the supreme court has ruled that a subsequent purchaser may not sue the developer under the SCUTPA, we must agree with the trial court that McConnell’s claim under the SCUTPA fails as a matter of law.
IV. Statute of Limitations
McConnell argues the trial court erred in finding his claims were barred by the statute of limitations. We agree.
McConnell’s claims are governed by the three-year statute of limitations. S.C. Code Ann. § 15-3-530(5) (2005). Under the discovery rule, the statute of limitations begins to run from the date the injured party either knows or should know, by the exercise of reasonable diligence, that a cause of action exists for the wrongful conduct. S.C. Code Ann. § 15-3-535 (2005); Dean v. Ruscon Corp., 321 S.C. 360, 363, 468 S.E.2d 645, 647 (1996).
The exercise of reasonable diligence means simply that an injured party must act with some promptness where the facts and circumstances of an injury would put a person of common knowledge and experience on notice that some right of his has been invaded or that some claim against another party might exist. The statute of limitations begins to run from this point and not when advice of counsel is sought or a full-blown theory of recovery developed.
Moriarty v. Garden Sanctuary Church of God, 341 S.C. 320, 328-29, 534 S.E.2d 672, 676 (2000) (citations omitted).
The statute of limitations is triggered not just by knowledge of an injury but by knowledge of facts, diligently acquired, sufficient to put an injured person on notice of the existence of a cause of action against another.
As we held above, the record contains conflicting evidence of whether McConnell could have and should have discovered the existence of the flood plain line with due diligence. A jury could reasonably determine the statute of limitations did not begin to run until McConnell discovered Burry’s concealment of the flood plain line. Thus, we find the trial court erred in determining the McConnell’s claims are barred by the statute of limitations.
We hold the trial court erred in granting summary judgment to Burry on McConnell’s claims for fraud, constructive fraud, negligent misrepresentation, and negligence. We hold the court correctly held McConnell’s claim under the SCUTPA fails as a matter of law. Accordingly, the order of the trial court is
AFFIRMED IN PART AND REVERSED IN PART.
HEARN, C.J., and HUFF and BEATTY, JJ., concur.
 McConnell settled with Rabon Creek by entering into an inconsistent use agreement. Thus, the only bar to construction now is the flood line.
 However, every survey, including McConnell’s survey by