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2009-UP-030 - Carmichael v. Oden

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

A.E. Carmichael, Jr. d/b/a Lake View Gas Company & Carmichael Farm Supply Co., Respondent,

v.

Benita Joyce Page Oden, Douglas Lee Page and David Carroll Page, Defendants,/Of whom Benita Joyce Page Oden is the Appellant.


Appeal From Dillon County
 Paul M. Burch, Circuit Court Judge


Unpublished Opinion No. 2009-UP-030
Heard November 5, 2008 – Filed January 14, 2009


AFFIRMED


Marcus LeFond Woodson, of Marion, for Appellant.

A. Glenn Greene, Jr., of Dillon and Marian D. Nettles, of Lake City, for Respondent.

PER CURIAM: Benita[1] Joyce Page Oden appeals the order of the trial court denying her motions for continuance, to set aside a default judgment, and to dismiss and to grant foreclosure of a mortgage held by A.E. Carmichael, d/b/a Lake View Gas Company and Carmichael Farm Supply Co.  We affirm.

FACTS/PROCEDURAL HISTORY

Carmichael stated in his complaint that on October 2, 1986, Oden’s father, Jasper Page, Jr., executed and delivered to him a note for the amount of $50,585.05 with the interest rate of 12% per annum secured by a mortgage on a 1.1 acre tract in Dillon County.  The principal was to be repaid 10% a year for 10 years.  Page transferred the property to Oden before his death on June 16, 2001.  Carmichael filed this action to foreclose the mortgage on May 16, 2006, originally naming as defendants Oden and Page or his heirs, personal representatives, successors, assigns, spouses, creditors, and any other claiming a right to the property.  Carmichael amended his complaint on July 25, 2006 to name only Oden and her brothers, Douglas Lee Page and David Carroll Page, as defendants.

On July 27, 2006, Carmichael attempted to serve Oden through certified mail, restricted delivery, return receipt at her address in Upper Marlboro, Maryland.  He also sent her the documents through regular mail.  The certified mail was returned unclaimed, but the regular mail was not returned.  Carmichael also attempted service through the Dillon County Sheriff’s Department, but the Sheriff’s Department was unable to locate her. 

On September 15, 2006, Carmichael filed a petition for an order of publication.  Attached to the petition was an affidavit of non-service by the sheriff’s deputy and an affidavit from Carmichael’s attorney detailing the attempts at service.  The affidavit of Carmichael’s attorney was not notarized.  The Dillon County Clerk of Court issued the order for publication that day.  The notice appeared in The Dillon Herald on September 19, September 26, and October 3, 2006. 

On November 7, 2006, Carmichael filed an affidavit of default.  The matter was referred to the Master in Equity, who issued an order of default.  Carmichael sent Oden notice of the hearing set for November 20, 2006 to her Maryland address.  On November 15, 2006, Oden requested the master recuse himself.  The master granted the request and cancelled the hearing, which was rescheduled for January 3, 2007.  Notice of the hearing was mailed to Oden on December 27, 2006.  On January 2, 2007, Oden filed a motion for continuance.  In the motion her attorney stated that he had been retained on December 28, 2006 and would like to have the opportunity to engage in discovery.  Oden also filed motions to set aside entry of default and to dismiss. 

At the hearing, the trial court denied Oden’s request for a continuance.  Although Oden was not allowed to offer her own witnesses, she was able to cross-examine Carmichael, the only witness, and to present evidence of a payment Page made in 1989. 

In its written order, the trial court held the action was duly filed and served on Oden.  The court found the issue of the statute of limitations did not involve jurisdiction but rather was an affirmative defense which Oden had neither pled nor proved.  It granted Oden a credit for $12,990.31 paid in 1989 and calculated the debt with interest compounded annually at 12% to be $253,423.12. In addition, the court added $5,000.00 in attorney’s fees and $609.61 in costs and ordered foreclosure for this amount.  The court noted that Oden was not personally liable for any deficiency and the judgment was solely against the property.  Oden filed a motion to alter or amend the judgment, which the court denied.  This appeal followed. 

LAW/ANALYSIS

I.  Continuance

Oden argues the trial court erred in denying her motion for a continuance.  Her attorney was retained on December 28, 2006 and the hearing was held on January 3, 2007.  Her attorney stated he needed the time to engage in discovery and to file any necessary motions.  The trial court believed the request for a continuance was merely a ploy to delay the matter.  It noted Oden had already received a continuance of the hearing scheduled November 20, 2006 when the master recused himself at her request by order dated November 16, 2006.  Oden did not retain counsel until almost a month and a half later. 

The grant or denial of a continuance lies within the sound discretion of the trial court, and its ruling will not be reversed absent a clear showing of abuse of discretion.  State v. Tanner, 299 S.C. 459, 462, 385 S.E.2d 832, 834 (1989). “Moreover, the denial of a motion for a continuance on the ground that counsel has not had time to prepare is rarely disturbed on appeal.”  Plyler v. Burns, 373 S.C. 637, 650, 647 S.E.2d 188, 195 (2007).

We find the trial court did not abuse its discretion in denying the continuance. 

II.  Denial of motion to set aside the entry of default

Oden argues the trial court erred in denying her motion to set aside the entry of default.  She asserts several reasons why the trial court erred in finding the notice by publication was proper.  

Under Rule 55(c) of the South Carolina Rules of Civil Procedure, a default may be set aside “for good cause shown.”  “The decision whether to grant relief from an entry of default is solely within the sound discretion of the trial court.”  Wham v. Shearson Lehman Bros., 298 S.C. 462, 465, 381 S.E.2d 499, 501 (Ct. App. 1989). 

1.  Type of action for service by publication

Oden argues that because Carmichael knew her Maryland address, he should have attempted to have a sheriff in the Maryland county of her residence serve her.     Section 15-9-710 of the South Carolina Code provides for service by publication when the person upon whom service is to be made cannot, after due diligence, be found in this state and:

(4) when the defendant is not a resident of this State but has property therein and the court has jurisdiction of the subject of the action;

(5) when the subject of the action is real or personal property in this State and the defendant has or claims a lien or interest, actual or contingent, therein or the relief demanded consists wholly or partly in excluding the defendant from any interest or lien therein . . . .

S.C. Code Ann. § 15-9-710 (2005). 

This was an action solely for foreclosure of a mortgage on property located in Dillon County, South Carolina.  Accordingly, this is the type of case where service by publication is authorized by statute.

2.  Location of newspaper in which notice was published

Oden also claims publication did not take place in the proper location. Section 15-9-740 of the South Carolina Code provides for the order of publication to direct publication to be made in the newspaper “most likely to give notice to the person to be served . . . .” S.C. Code Ann. § 15-9-740 (2005).  Oden asserts the notice should have been published in Upper Marlboro, Maryland.  However, when Carmichael attempted to serve her at her address in Maryland through certified mail, the letter was returned unclaimed.  The order of publication provides Oden could not be located in Dillon County, South Carolina, or her last known address.  As Oden could not be located at her Maryland address, we find it was within the trial court’s discretion to find that the newspaper in Dillon County, where it was known Oden owned property, was the one “most likely to give notice” to Oden.  Accordingly, we find no error in the trial court’s ruling that the notice by publication in Dillon County was proper.   

3.  Affidavits to support order of publication

Oden asserts Carmichael did not provide affidavits sufficient to support an order of publication.  Section 15-9-710 of the South Carolina Code provides for service by publication:

When the person on whom the service of the summons is to be made cannot, after due diligence, be found within the State and (a) that fact appears by affidavit to the satisfaction of the court or judge thereof, the clerk of the court of common pleas, the master, or the probate judge of the county in which the cause is pending and (b) it in like manner appears that a cause of action exists against the defendant in respect to whom the service is to be made or that he is a proper party to an action relating to real property in this State . . . .

S.C. Code Ann. § 15-9-710 (2005). 

Thus, in order to obtain an order for service by publication, Carmichael had to establish by affidavit that after searching with due diligence, neither he nor anyone on his behalf was able to locate Oden within this State and that Oden was a proper party to an action relating to real property in this State.  “Generally, absent fraud or collusion, once the issuing officer is satisfied with the supporting affidavit, the decision to order service by publication is final unless the order of publication is premised upon a facially defective affidavit.”  Brown v. Malloy, 345 S.C. 113, 118, 546 S.E.2d 195, 197 (Ct. App. 2001); see Miles v. Lee, 319 S.C. 271, 274, 460 S.E.2d 423, 425 (Ct. App. 1995) (finding the affidavit supporting publication was facially defective because it purported to show due diligence in ascertaining the whereabouts of someone other than the person to be served).

Oden argues the trial court erred in denying the motion to set aside the entry of default because the affidavit of publication was facially defective in the following ways:  a) the document was not notarized, b) the document does not state that Oden owned property in South Carolina, c) the document does not state the nature of the action against Oden, d) the unclaimed letter sent by certified mail was not filed in the office of the Clerk of Court, and e) the Sheriff’s Deputy’s affidavit of non-service misspelled Oden’s first name. 

Carmichael acknowledges his attorney’s affidavit requesting publication was not notarized.  He asserts the fact that the statements were made “as Attorney for the Plaintiff and an Officer of the Court” should suffice to satisfy the requirement of the statute.  However, the supreme court noted that a sworn statement from an attorney did not comply with South Carolina’s requirements for a valid affidavit because it was not notarized.  Black v. Lexington Sch. Dist. No. 2, 327 S.C. 55, 58, 488 S.E.2d 327, 328 (1997); but see S.C. Ins. Co. v. Barlow, 301 S.C. 502, 508, 392 S.E.2d 795, 798 (Ct. App. 1990) (excusing failure to have notarized Department of Transportation officer’s signature on Form FR-9 because to hold otherwise would amount to a sacrifice of substance to form). 

“Under the plain meaning rule, it is not the court’s place to change the meaning of a clear and unambiguous statute.”  Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000).   Section 15-9-710 clearly requires an affidavit.  Carmichael’s attorney’s statement does not fulfill this requirement. 

However, Carmichael attached to his petition for service by publication the affidavit of Ken Rogers, the Deputy Sheriff for Dillon County, in which Rogers represented he had not been able to find “Benita Joyce Page Oden” after diligent efforts to find her.  Oden states this affidavit is defective because it misspells her first name, which is Bonita, not Benita. 

In Miles v. Lee the affidavit supporting publication in an adoption/termination of parental rights action stated that after due diligence “Kenneth Wayne Lee” could not be found in this state.  The father, whose name was “Robert Lewis Miles,” was the actual defendant and was not named in the affidavit.  Miles v. Lee, 319 S.C. at 273, 460 S.E.2d at 424.  This court held the affidavit was facially defective and thus the order of publication was not supported by a sufficient affidavit.  Id. at 274, 460 S.E.2d at 425.

Here, Oden’s first name is spelled Benita in all of the pleadings.    We find the trial court did not abuse its discretion in allowing this affidavit to support the order of publication. 

The order of publication in this case also must be supported by an affidavit showing Oden was a proper party to an action relating to real property in this State.  Carmichael asserts the affidavit of verification of the complaint in this action satisfied this requirement.  A verified complaint is an acceptable substitute for an affidavit at the summary judgment phase.  Dawkins v. Fields, 354 S.C. 58, 67, 580 S.E.2d 433, 438 (2003).  The supreme court recognized that a verified complaint may augment an affidavit for the purpose of furnishing the grounds for issuing a warrant of attachment and in proceedings for claim and delivery.  Plowden v. Mack, 217 S.C. 226, 232, 60 S.E.2d 311, 314 (1950).   While the court recognized the remedy of attachment was a drastic one and the provisions of the code relating to it must be strictly followed and adhered to, it held a verified complaint will take the place of the affidavit required by the statute.  Biltrite Bldg. Co v. Adams, 193 S.C. 142, 150, 7 S.E.2d 857, 860 (1940).

We find the verified complaint could be used in the place of the affidavit required by section 15-9-710.  Accordingly we find the trial court did not abuse its discretion in finding the order of publication was properly supported by affidavits. 

As we find the trial court did not abuse its discretion in holding that service by publication was proper, we conclude the court did not err in denying the motion for relief from default judgment. 

4. Timeliness of service

Oden argues the publication of the summons did not take place within a reasonable time pursuant to the Rules of Civil Procedure.  She cites to Rule 3(b), SCRCP, which provides for tolling of the statute of limitations when after filing, the pleadings are delivered to the sheriff of the county where the defendant was known to last reside for service upon the defendant, provided actual service occurs within a reasonable time thereafter.

This rule is only applicable to the tolling of the statute of limitations.  While delivery of the pleadings to the Dillon County Sheriff may not have tolled the statute, we find no error by the trial court because, as discussed below, the statute of limitations still has not run.

III.  Failure to join necessary party. 

Oden asserts the court should have granted her motion to dismiss because Carmichael failed to name Page as a party to this action.  A motion under Rule 12(b)(7) is proper where a necessary party under Rule 19 should be joined for a just adjudication of the issues.  BancOhio Nat’l Bank v. Neville, 310 S.C. 323, 326, 426 S.E.2d 773, 775 (1993).  “The rule provides an affirmative defense for the failure to join any interested party who is subject to service of process, and who will not deprive the court of jurisdiction over the subject matter under Rule 19, SCRCP.”

Page is deceased.  Carmichael did not seek a judgment against his estate.  Instead, he only sought foreclosure of the mortgage on property that Page deeded to Oden before his death.  Accordingly, Page was not a necessary party to this action. 

IV.  Statute of limitations

Oden argues the statute of limitations bars this action.  She asserts that because the debt preexisted the mortgage, the time for the statute to run began in 1985, before the mortgage was executed on October 2, 1986.  In the alternative, she maintains that when considering the date on the mortgage, the action must have been commenced on or before October 2, 2006 and service by publication was not complete until October 3, 2006.

First, “[t]he failure to plead an affirmative defense is deemed a waiver of the right to assert it.”  Whitehead v. State, 352 S.C. 215, 220, 574 S.E.2d 200, 202 (2002).   Oden has not filed an answer in this matter and has waived the right to assert the affirmative defense of statute of limitations.  In addition, the statute has not run in this matter.   

Section 29-1-10 of the South Carolina Code provides:

No mortgage or deed having the effect of a mortgage or other lien shall constitute a lien upon any real estate after the lapse of twenty years from the date for the maturity of the lien. However, if the holder of the lien shall, at any time during the continuance of the lien, cause to be recorded upon the record of that mortgage or deed having the effect of a mortgage or other lien a note of some payment on account or some written acknowledgment of the debt secured thereby, with the date of the payment or acknowledgment, the mortgage or deed having the effect of a mortgage or other lien shall be, and shall continue to be, a lien for twenty years from the date of the record of that payment on account or acknowledgment. When there is no maturity stated or fixed in the mortgage or the record of the mortgage, then the provisions hereof are applicable from the date of that mortgage and that mortgage shall not constitute a lien after the lapse of twenty years from the date thereof.

S.C. Code Ann. § 29-1-10 (2007). 

The statute did not begin to run until the date of the maturity of the mortgage.  Carmichael testified that under the terms of the mortgage, Page was to pay ten percent of the debt annually for ten years.  The mortgage, therefore, did not mature until October 2, 1996. This action was brought well within the twenty year-statute. In addition, Oden presented evidence that Page made a payment on the mortgage in 1989 and the trial court calculated this payment in determining the amount of the debt.  Oden acknowledged in her brief that the statute of limitations would run twenty years from the last payment.   Accordingly, the statute of limitations does not bar Carmichael’s action.[2]  

V.  Failure to allow Oden to testify

Oden asserts the trial court erred in failing to allow her or her brother to testify.  First, it does not appear Oden requested to testify at the hearing.  Thus, this issue is not properly before the court.  See Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) (“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.”).  Further, the record does not show what this testimony might have been.  See  State v. King, 367 S.C. 131, 136, 623 S.E.2d 865, 868 (Ct. App. 2005) (stating a reviewing court may not consider error alleged in the exclusion of testimony unless the record on appeal shows fairly what the rejected testimony would have been).  Accordingly, the issue is not properly before this court. 

VI.  Validity of mortgage

Oden asserts Carmichael failed to establish he held a valid mortgage.  She claims the mortgage did not secure a specific debt.  Carmichael testified, without objection, that prior to the mortgage he sold fertilizer, LP gas, and gasoline to Page on credit.  He then required Page to execute a mortgage for the debt amount. Thus, there is a specific debt secured by the mortgage. 

Oden also argues there was no testimony that the mortgage was validly executed.  She also complains there was no testimony as to the amount of the mortgage.  Carmichael did not testify as to this exact amount but said the debt was around $50,000.  In addition, the verified complaint lists the original debt amount as $50,585.05.  As Oden was in default, all of the allegations in the complaint, including the validity of the mortgage and the amount of the mortgage amount, are admitted.  See State ex rel. Medlock v. Love Shop, Ltd., 286 S.C. 486, 488, 334 S.E.2d 528, 530 (Ct. App. 1985) (stating an entry of an order of default is an admission by the defaulting party of the well-pleaded allegations of the complaint). 

Oden states the judgment in favor of Carmichael was improper because he never introduced documents into the record.  Carmichael testified that he could not find the original note and mortgage.  In the order on Carmichael’s motion to alter or amend, the trial court noted “[t]hat the mortgage on record in the clerk’s office, which [Oden’s] own evidence referred to and presented evidence in the subordination agreement, was clear as to the terms of the agreement so that no original note and mortgage was necessary.”  In addition, Carmichael testified as to the terms of the mortgage without objection.  “Evidence received without objection is competent.”  Toyota of Florence v. Lynch, 314 S.C. 257, 266, 442 S.E.2d 611, 616 (1994). 

Oden argues the fact Carmichael does not have the mortgage could be evidence that the mortgage had been satisfied and cancelled.  This issue was neither raised to nor ruled on by the trial court.  See Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) (“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.”).  Accordingly, there is no error on this issue. 

VII.  Calculation of interest

Oden argues the trial court erred in allowing Carmichael to testify to his reasonable belief about the amount owed on the mortgage without any supporting calculation.  Carmichael testified he had a bank employee calculate the interest on the mortgage and then, over Oden’s hearsay objection, stated that amount.  The trial court, however, clearly made its own calculation of the total debt owed as it allowed for credit for the 1989 payment of $12,990.31.  Accordingly, even if there was any error in allowing Carmichael’s testimony, it was harmless.  See JKT Co. v. Hardwick, 274 S.C. 413, 419, 265 S.E.2d 510, 513 (1980) (stating an error not shown to be prejudicial does not constitute grounds for reversal).

VIII.  Usury

Oden asserts that the amount of interest Carmichael sought was usurious and therefore Carmichael forfeited all interests and costs.  “Unconscionability has been recognized as the absence of meaningful choice on the part of one party due to one-sided contract provisions, together with terms which are so oppressive that no reasonable person would make them and no fair and honest person would accept them.”  Jones Leasing v. Gene Phillips & Assocs., 282 S.C. 327, 331, 318 S.E.2d 31, 33 (Ct. App. 1984). The mortgage called for the debt to accrue interest at the rate of 12% compounded annually.  Although due to the passage of time, the debt has increased substantially, the transaction was not oppressive.  We find no error in the trial court’s ruling.

IX.  Attorney’s fees

Oden argues the trial court erred in granting Carmichael attorney’s fees because there was no evidence regarding the amount of attorney’s fees.  Although Oden did object to the court granting attorney’s fees in her motion to alter or amend, the basis for this objection was “Plaintiff did not request attorney’s fees at trial.” Carmichael did request attorney’s fees in the complaint.  Thus, the trial court did not err denying Oden’s motion to alter or amend on this issue.  Oden never objected to the amount of the fees or the basis for the award until appeal. This issue is not properly before this court.  See Durham v. Vinson, 360 S.C. 639, 654, 602 S.E.2d 760, 767 (2004) (party may not argue one ground for objection at trial and another ground on appeal). 

CONCLUSION

For the foregoing reasons, the decision of the trial court is

AFFIRMED.

ANDERSON, HUFF, and THOMAS, JJ., concur. 


[1] Although the pleadings and order in this case list Oden’s first name as Benita, she claims her name is actually Bonita.

[2] See I’On v. Town of Mt. Pleasant, 338 S.C. 406, 420, 526 S.E.2d 716, 723 (2000) (stating an appellate court may affirm for any reason appearing in the record).