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2010-UP-310 - Pinnacle Condominium Association v. Drake Development

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Pinnacle Condominium Association, Inc., Plaintiff,

v.

Drake Development Corporation, a South Carolina Corporation, McDevitt Street Bovis, Inc., and E. Ralph Walden & Associates, Defendants,

v.

ISPO, Inc., Shields, Inc., Ballenger Glass Service, Inc., Weathergard, Inc., and Rebarco, Inc., Third-Party Defendants,

of whom Shields, Inc. is the Appellant

and McDevitt Street Bovis, Inc. is the Respondent.


Appeal From Horry County
 Steven H. John, Circuit Court Judge
 John L. Breeden, Circuit Court Judge


Unpublished Opinion No. 2010-UP-310
Heard April 15, 2010 – Filed June 11, 2010
Withdrawn, Substituted, and Refiled June 18, 2010


REVERSED


Robert T. Lyles and Jason A. Pittman, of Charleston, for Appellant.

Joseph S. McCue, Christian Stegmaier, and Amy L. Neuschafer, of Columbia, for Respondent.

PER CURIAM:  Shields, Inc. (Shields) appeals orders of the circuit court granting relief from a prior order dismissing the case and granting summary judgment in favor of Respondent McDevitt Street Bovis, Inc. (McDevitt).  Shields argues that the court erred in granting McDevitt's request for relief under Rule 60(b), SCRCP, by finding the dismissal was void ab initio and by denying application of Shields' defenses because of Shields' unclean hands.  We reverse.

FACTS/PROCEDURAL HISTORY

This appeal arises out of the construction of a nine story, fifty-four unit condominium apartment complex in North Myrtle Beach, known as Pinnacle.  McDevitt was the general contractor for the original construction and hired Shields as a subcontractor.  In 1989, McDevitt and the Pinnacle Condominium Association, on behalf of all of the individual unit owners, signed a release wherein Pinnacle released McDevitt from liability resulting from certain construction defects in return for a settlement payment.  As part of the release, Pinnacle assigned to McDevitt any claims it might have against Shields.

In 1990, McDevitt filed a lawsuit against Shields for defects in the installation of synthetic stucco (R-Wall) at Pinnacle.  In its complaint, McDevitt alleged Shields breached its contract by failing to construct the R-Wall in a good and workmanlike manner and by failing to repair the damages upon McDevitt's request.  A jury awarded McDevitt actual damages, attorney's fees, and costs.  Before the matter could be decided on appeal, McDevitt and Shields entered into a settlement agreement and mutual release in 1993.

In 1997, the Pinnacle Condominium Association filed a new lawsuit, which is the subject of the present appeal, against the developer, the architect, and McDevitt as the general contractor.  Pinnacle alleged installation and construction defects in the exterior wall system.  McDevitt subsequently filed a third-party complaint against Shields and four other subcontractors.  McDevitt alleged it was entitled to indemnification against the claims Pinnacle asserted regarding Shields' work.  Alternatively, McDevitt alleged Shields breached its subcontract and/or warranties, owed McDevitt a defense and indemnification, and owed contribution if Pinnacle's allegations proved to be correct.

In 1998, the case was assigned to the Honorable John L. Breeden, Jr.  McDevitt filed a motion for summary judgment, which Judge Breeden granted after a hearing.  The order, filed August 8, 2000, granted summary judgment in favor of McDevitt for contractual indemnity and collateral estoppel and denied Shields' motion for summary judgment.  On August 17, 2000, Shields filed a motion to alter or amend pursuant to Rule 59(e), SCRCP, and an amended motion approximately one week later.

On April 2, 2001, Shields' attorney wrote Judge Breeden a letter asking him to rule on the pending Rule 59(e) motion.  Shields' attorney wrote Judge Breeden another letter on May 10, 2001, asking him to hear the pending Rule 59(e) motion.  In December of 2001, Judge Breeden signed an order dismissing all of the claims in the action except for McDevitt's third-party claims against Shields and two other subcontractors. 

On May 17, 2002, Shields' attorney again wrote Judge Breeden asking him to set the pending motion for hearing.  On June 28, 2002, the Honorable Steven H. John signed a Form 4 order dismissing the action pursuant to Rule 43(k), SCRCP, which was filed on July 3, 2002.  On August 27, 2002, McDevitt filed a motion pursuant to Rule 60(b), SCRCP, asking the court to reinstate the case because the 2002 dismissal was entered on the mistaken assumption that all claims in the action had settled.  Judge Breeden signed an order filed September 11, 2002, reopening the case without holding a hearing.  In the meantime, the pending Rule 59(e) motion was scheduled for a hearing but was continued upon Shields' request on October 1, 2002.

On January 17, 2003, McDevitt's attorney wrote Shields' attorney, asking for available times to schedule the Rule 59(e) motion for a hearing.  On July 1, 2003, Shields' attorney wrote Judge Breeden again, asking him to reschedule Shields' Rule 59(e) motion.  On July 3, 2003, the Clerk filed another Form 4 order that had been signed by Judge John on June 27, 2003, dismissing the action again pursuant to Rule 43(k), SCRCP (the 2003 Dismissal).  McDevitt did not file a Rule 59(e) motion to alter or amend the 2003 Dismissal; instead, it filed another Rule 60(b), SCRCP, motion on August 19, 2003, asking the court to reinstate the case again because of mistake. 

After almost three years of inactivity, attorney Joseph McCue sent a letter to the Clerk of Court on May 25, 2006, asking for a hearing on McDevitt's second Rule 60(b) motion.  Shields' attorney responded in a letter to the Clerk dated June 9, 2006, and argued that McCue was not McDevitt's attorney of record and that the case had been dismissed in 2003.  On June 29, 2006, McCue sent a proposed consent order to substitute counsel to the Clerk, which was never signed.

The case remained dormant until January 16, 2008, when McCue sent a letter to the Clerk of Court memorializing a telephone conversation with the nonjury docket coordinator and setting the motion for a hearing on February 4, 2008.  On March 18, 2008, McCue sent another consent order to substitute counsel to the Clerk, along with the required filing fee.  On March 20, 2008, Judge John heard arguments on McDevitt's second Rule 60(b) motion and Shields' rule 59(e) motion.  Judge John granted McDevitt's Rule 60(b) motion for relief, found the 2003 Dismissal void ab initio, and denied Shields' Rule 59(e) motion due to the impossibility of a rehearing.  This appeal followed.

STANDARD OF REVIEW

The decision to grant or deny a Rule 60(b) motion is within the sound discretion of the trial judge.  BB&T v. Taylor, 369 S.C. 548, 551, 633 S.E.2d 501, 502 (2006).  The appellate standard of review is limited to determining whether there was an abuse of discretion.  Id. at 551, 633 S.E.2d at 502-03.  An abuse of discretion occurs when the order of the court is controlled by an error of law or where the order is based on factual conclusions that are without evidentiary support.  Sundown Operating Co. v. Intedge Indus., Inc., 383 S.C. 601, 607, 681 S.E.2d 885, 888 (2009). 

ANALYSIS

Shields argues the trial court erred in finding the 2003 Dismissal was void ab initio instead of merely being voidable; thus, because the order is only voidable, Shields is entitled to raise certain legal and equitable defenses.  We agree.

1.  As to whether the trial court erred in finding the 2003 Dismissal void ab initio:  Although the court did not explicitly base its ruling on Rule 60(b)(4), SCRCP, we proceed as if the trial court granted McDevitt's motion on that basis.  We find the 2003 Dismissal is not void because the circuit court has jurisdiction to determine contractual disputes; therefore, the trial court's ruling was an error of law.  See Rule 60(b)(4), SCRCP (setting forth the circumstances in which a party may obtain relief from a final judgment when that judgment is void); Thomas & Howard Co. v. T.W. Graham & Co., 318 S.C. 286, 291, 457 S.E.2d 340, 343 (1995) ("A void judgment is one that, from its inception, is a complete nullity and is without legal effect and must be distinguished from one which is merely 'voidable.' . . . Generally, a judgment is void only if a court acts without jurisdiction."); S.C. Const. art. V, § 11 (2009) (delineating the jurisdiction of the circuit court); Capital City Ins. Co. v. BP Staff, Inc., 382 S.C. 92, 100, 674 S.E.2d 524, 528 (Ct. App. 2009) (defining subject matter jurisdiction as the power to hear and determine cases of the general class to which the proceedings in question belong).

2.  As to whether the trial court erred in finding Shields had unclean hands:  We find Shields did not have a duty to ask for a hearing on McDevitt's motion; therefore, the trial court's refusal to consider Shields' defenses was an error of law.  See Don Shevey & Spires, Inc. v. Am. Motors Realty Corp., 279 S.C. 58, 60, 301 S.E.2d 757, 759 (1983) ("While a defendant may bring about an expeditious trial of a case, he has no legal obligation to do so; except to meet such actions as are taken by the plaintiff, he may remain passive.") (internal citation and quotation omitted).

3.  As to Shields' defense of waiver:  We find McDevitt waived its right to assert its Rule 60 motion when it abandoned the case for several years by failing to pursue a hearing or ruling on the motion and/or by failing to diligently pursue its case.  See Dep't of Soc. Servs. v. Mrs. H., 346 S.C. 329, 334, 550 S.E.2d 898, 901 (Ct. App. 2001) (concluding defendants waived and abandoned their opportunity for a hearing on a Rule 60 motion when seven years elapsed between the filing of the motion and the hearing on the motion); Strickland v. Strickland, 375 S.C. 76, 85, 650 S.E.2d 465, 470 (2007) (holding waiver is the "voluntary and intentional relinquishment or abandonment of a known right.") (internal quotation omitted); Janasik v. Fairway Oaks Villas Horizontal Prop. Regime, 307 S.C. 339, 344, 415 S.E.2d 384, 387-88 (1992) (finding the party claiming waiver must show the other party possessed, at the time, actual or constructive knowledge of his rights or of all the material facts upon which they were dependent).

4.  Due to our disposition herein, we need not address any remaining issues on appeal.  See Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (noting an appellate court need not address the remaining issues on appeal when the disposition of a prior issue is dispositive).

REVERSED.

PIEPER and GEATHERS, JJ., and CURETON, A.J., concur.