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2008-UP-003 - Combs v. Combs

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


L. Brownell Combs, II, Respondent,

v.

Wilhelmina Combs, Appellant.


Appeal From Kershaw County
 Jeffrey M. Tzerman, Circuit Court Judge


Unpublished Opinion No. 2008-UP-003
Heard December 12, 2007 – Filed January 2, 2008


AFFIRMED


William S. Tetterton, of Camden, for Appellant.

Thomas E. Lydon, of Columbia, for Respondent.

PER CURIAM:  This is an appeal from the denial of Appellant’s motion to set aside the judgment of foreclosure pursuant to Rule 60(b)(4), SCRCP.  She maintains the Master-in-Equity in Kershaw County did not have subject matter jurisdiction.  We affirm.

FACTS

In 1983, the parties deeded their ownership in property located in Kershaw County, South Carolina, to Diablita, Inc., a corporation controlled by Appellant.  Prior to being married in 1987, the parties signed an antenuptial agreement in which Respondent conveyed any ownership he had in Diablita to Appellant, making her the sole owner of the corporation.  Additionally, the agreement provided all property individually owned by either Appellant or Respondent, whether acquired before marriage or during the marriage, would remain the property of the individual with title to the property. 

In 1992, Diablita gave Ely Place Nominees, LTD., a promissory note and mortgage on the Kershaw County property in exchange for a loan of $300,000.  Respondent testified Ely Place held money on his behalf and made the loan at his direction.  He indicated the money loaned to Diablita were his personal funds. 

Appellant filed for divorce in 1997 in Florida and did not list the debt Diablita owed to Ely Place.  In addition, Appellant never raised the issue of the debt during the divorce proceedings. 

Appellant sought to obtain a loan on the property in 1999 and realized the mortgage and note to Ely Place were still outstanding.  She brought suit in Kershaw County, seeking to have the mortgage and note declared null and void due to fraud.  The trial court dismissed the case due to the expiration of the applicable statute of limitations.  Appellant filed an appeal to this court, which affirmed the dismissal in Diablita, Inc. v. Ely Place Nominees, Op. No. 2001-UP-517 (S.C. Ct. App. filed November 27, 2001).

Prior to the divorce hearing, Diablita deeded the property to Appellant individually.  The Final Judgment of Dissolution of Marriage was entered in Florida in 2000.  The divorce decree awarded possession of the Kershaw County property to Appellant but did not address the indebtedness in any manner.  Additionally, the divorce decree affirmed the antenuptial agreement signed by the parties and stated that any personal items not specifically addressed by the decree shall be the property of the party in possession and control of the item. 

In 2002, Ely Place assigned the note and mortgage to Respondent.  He commenced this action for foreclosure in 2003.  Prior to the hearing on the action in 2005, Appellant moved to dismiss for lack of subject matter jurisdiction.  The Master denied the motion.  The Master later issued a Master’s Report and Judgment of Foreclosure and Sale without mentioning the jurisdictional issue. 

Appellant filed an appeal from the denial of her motion to dismiss.  The appeal was dismissed by this court as interlocutory and not immediately appealable.  Appellant then filed a motion pursuant to Rule 60(b)(4), SCRCP, seeking an order setting aside the judgment and sale for lack of subject matter jurisdiction.  The Master denied the motion and this appeal followed. 

STANDARD OF REVIEW

Whether to grant or deny a motion under Rule 60(b), SCRCP, is within the sound discretion of the judge.  Coleman v. Dunlap, 306 S.C. 491, 494, 413 S.E.2d 15, 17 (1992).  Our standard of review, therefore, is limited to determining whether the Master committed an abuse of discretion.  BB&T v. Taylor, 369 S.C. 548, 551, 633 S.E.2d 501, 502-03 (2006).  An abuse of discretion occurs when the judge issuing the order was controlled by an error of law or the order is based on factual conclusions that are without evidentiary support.  Tri-County Ice & Fuel Co. v. Palmetto Ice Co., 303 S.C. 237, 242, 399 S.E.2d 779, 782 (1990).

LAW/ANALYSIS

Appellant maintains the Master erred in ruling he had subject matter jurisdiction to hear the foreclosure action.  She contends the Florida Family Court that heard the divorce action retained exclusive jurisdiction over the parties and their property.  We disagree.

“Subject matter jurisdiction refers to the court’s ‘power to hear and determine cases of the general class to which the proceedings in question belong.’”  Watson v. Watson, 319 S.C. 92, 93, 460 S.E.2d 394, 395 (1995) (quoting Dove v. Gold Kist, Inc., 314 S.C. 235, 237-38, 442 S.E.2d 598, 600 (1994)).  The Master-in-Equity is considered a division of the circuit court and obtains jurisdiction through an order of reference from the circuit court.  See S.C. Code Ann. § 14-11-15 (Supp. 2006); Rule 53, SCRCP.  A master would then have subject matter jurisdiction over a properly referred foreclosure action.  See Wachovia Bank of South Carolina, N.A. v. Player, 341 S.C. 424, 427, 535 S.E.2d 128, 129 (2000).

The Florida Family Court was endowed with the jurisdiction to decide issues related to the marital property of the parties and the equitable division of that property.  See Fla. Stat. Ann. § 61.075.  The Florida Court exercised this jurisdiction in approving the antenuptial agreement signed by the parties and in specifically allocating to each party the property individually titled in his or her name and the personal property he or she controlled. 

Assuming the Florida court had the power to determine issues related to the note and mortgage on the property, neither party raised the issues, and the Florida court did not address the debt in its divorce decree.  The sole determination by the Florida court would have been to determine to which party the property and any interest in Diablita or Ely Place belonged.  Cf. Davis v. Dieujuste, 496 So.2d 806 (Fla. 1986).  The Florida court upheld the antenuptial agreement which, when applied in this case, resulted in the Kershaw County property being distributed to Appellant and Respondent retaining whatever interest he may have had in Ely Place.  There were no further issues related to the property for the Florida court to determine.  Additionally, the Florida divorce action would not have been an appropriate forum for a foreclosure action to occur because Ely Place held the note and mortgage, and it was not a party to the divorce action.  As a result, the divorce decree did not eliminate the third-party debt to Ely Place, and res judicata would not apply to prevent a foreclosure in South Carolina.  See, e.g., Florida Bar v. Rodriguez, 959 So.2d 150, 158 (Fla. 2007) (requiring “(1) identity of the thing sued for; (2) identity of the cause of action; (3) identity of persons and parties to the action; and (4) ‘identity of quality in persons for or against whom claim is made.’”).  Moreover, under Florida law, a suit seeking transfer of title to real estate is considered to be quasi in rem and must be brought in the county where the land is situated.  See Goedmakers v. Goedmakers, 520 So.2d 575 (Fla. 1988).  Although a mortgage does not transfer title, it subjects the title to a lien, and a successful foreclosure would transfer legal title to the subject property.  Thus, the Florida divorce court did not have jurisdiction to entertain an action to foreclose or invalidate the mortgage lien in question.  See Hammond v. DSY Developers, LLC, 951 So.2d 985, 988-89 (Fla. Dist. Ct. App. 2007); Ocean Bank v. State Dept. of Financial Services, 902 So.2d 833, 835 (Fla. Dist. Ct. App. 2005). 

Even though the Florida court retained jurisdiction to enforce the divorce decree, this would extend only to those issues arising under the divorce decree.  The issues would relate to the possession of the property and not the validity of the note and mortgage assumed by Appellant with the allocation of the property.  In addition, the Florida Family Court would not have jurisdiction over Ely Place as it was a separate entity from Respondent and not a party in the Florida action. 

Accordingly, the divorce proceedings would not act as a bar to the South Carolina court’s having jurisdiction over the foreclosure action.  Because Appellant does not dispute the efficacy of the referral to the Master, the Master clearly had subject matter jurisdiction to hear the foreclosure action. 

CONCLUSION

We find the Master had subject matter jurisdiction to hear the foreclosure action.  Therefore, the order of the Master denying Appellant’s Rule 60(b)(4) motion is

AFFIRMED.

HUFF AND PIEPER, JJ., and CURETON, AJ., concur.