R. BRYAN HARWELL, District Judge.
This case stems from a contract between Charlie Alston
This case stems from a series of lease agreements with options to purchase entered into between Alston and Defendant, involving property that Defendant owned in Darlington, South Carolina. Alston and Defendant executed the initial lease and option to purchase on August 10, 1999, which included an agreed upon purchase price of $300,000 for Defendant's property. (See Aff. in Opp. ¶ 10; Aug. 1999 Lease [Docket Entry 38-3] at 1-5.) The 1999 Lease was witnessed and notarized, and contained the language "Signed, sealed and delivered" above the parties' signatures. (Aug. 1999 Lease at 5.) The Lease, with an option to purchase, was renewed multiple times, with the last renewal occurring on July 17, 2000. (See July 2000 Lease [Docket Entry 38-7] at 1-4.) Again, that July 2000 Lease was witnessed and notarized, and contained the language "Signed, sealed and delivered" above the parties' signatures. (Id. at 4.)
It appears that Alston continually made payments to Defendant under the Lease. On March 15, 2005, Defendant indicated to Alston, by way of letter, that Alston would owe a balance of $22,375.51 on March 31, 2005. (Def. Letter [Docket Entry 38-4] at 1.)
On May 24, 2005, a fire damaged the building-known as the Tropical Lounge-located on Defendant's property. According to Plaintiff, pursuant to an oral modification of their "Contract," Alston had "paid for and maintained a fire insurance policy on the subject premises with [] Defendant being named as the owner of the premises." (Compl. [Docket Entry 1] ¶ 34.; Aff. in Opp. ¶ 15.) Plaintiff further asserts that, pursuant to the oral modification, the insurance proceeds were to be used to rehabilitate the property if a fire occurred, (Compl. ¶ 35), but that Defendant improperly received and kept the insurance proceeds instead, (Aff. in Opp. ¶¶ 15-16).
On November 23, 2005, Defendant transferred title to the property to Plaintiff, for an additional consideration of $30,168. (Deed [Docket Entry 38-5] at 1-2.) The Deed was witnessed and notarized, and contained the language "[s]igned, sealed and delivered" above the parties' signatures. (Id. at 2-3.) The Darlington County Clerk of Court recorded the Deed on November 28, 2005. (Id. at 2.)
Alston died on December 10, 2006, and his sister, Gloria Alston, "reviewed his personal effects, documents, accounts, and real estate holdings" as administratrix of his estate. (Aff. in Opp. ¶¶ 2, 9.) Gloria Alston states that her brother had regularly discussed his business affairs with her in the past, and that he had informed her of the fire at the Tropical Lounge. (Id. ¶¶ 4, 8.) Upon reviewing the documents in her brother's office, Gloria Alston obtained copies of the Leases and the Deed that have been provided to the court. (Id. ¶¶ 10-14.)
On May 23, 2011, Gloria Alston, as administratrix, filed this lawsuit on behalf of Plaintiff. In the Complaint, Plaintiff asserts a cause of action for specific performance, and demands the following relief:
(Compl. ¶ 52.)
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record . . .; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1).
When no genuine issue of any material fact exists, summary judgment is appropriate. Shealy v. Winston, 929 F.2d 1009, 1011 (4th Cir. 1991). The facts and inferences drawn from the evidence must be viewed in the light most favorable to the non-moving party. Id. However, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248 (1986) (emphasis in original).
"[O]nce the moving party has met [its] burden, the nonmoving party must come forward with some evidence beyond the mere allegations contained in the pleadings to show that there is a genuine issue for trial." Baber v. Hospital Corp. of Am., 977 F.2d 872, 874-75 (4th Cir. 1992). The nonmoving party may not rely on beliefs, conjecture, speculation, or conclusory allegations to defeat a motion for summary judgment. See id. Rather, the nonmoving party is required to submit evidence of specific facts by way of affidavits, depositions, interrogatories, or admissions to demonstrate the existence of a genuine and material factual issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
Defendant moves for summary judgment on the ground that Plaintiff's claim is barred by South Carolina's three-year statute of limitations for breach of contract actions. See S.C. Code § 15-3-530(1) (establishing a three-year statue of limitations for "action[s] upon a contract, obligation, or liability"); see also Carolina Marine Handling, Inc. v. Lasch, 609 S.E.2d 548, 550 (S.C. Ct. App. 2005) ("As a general rule, a three-year statute of limitations applies to contract actions in South Carolina."). Defendant contends that Plaintiff's action is based on their Lease and an oral modification to that Lease regarding fire insurance, and is thus subject to the three-year statute of limitations. (See Motion for Summ. J. at 3.)
If the three-year statute of limitations set forth in § 15-3-530(1) is, in fact, the statute of limitations applicable to Plaintiff's claim, then the claim clearly should be dismissed as time-barred. Defendant appears to contend that the statute of limitations began to run on May 24, 2005-the date on which the fire damaged the Tropical Lounge. (See Def Reply at 4.) Plaintiff, on the other hand, specifically contends that the breach of the contract at issue occurred in December of 2005. (See Plf Resp. in Opp. at 14.) Regardless of which of those dates actually triggered the three-year statute of limitations, the court notes that Plaintiff still waited until May 23, 2011 to file the instant action. Thus, Plaintiff's Complaint is time-barred under § 15-3-530's statute of limitations, as it was filed more than five years after either of the above, suggested triggering dates.
Plaintiff, however, makes two separate arguments in response to Defendant's assertion that the claim is time-barred. First, Plaintiff argues that the Lease, with option to purchase, is a "sealed instrument" governed by a twenty-year statute of limitations. Second, Plaintiff alternatively argues that this action pertains to an interest in land subject to a ten-year statute of limitations. The court will address each of Plaintiff's arguments in-turn.
Plaintiff argues that the statute of limitations has not expired because the Lease, with an option to Purchase, is a sealed instrument.
Here, while neither party contends that they actually, physically attached a seal
S.C. Code § 19-1-160. The South Carolina Court of Appeals recently discussed § 19-1-160 at length:
Carolina Marine Handling, Inc., 609 S.E.2d at 550-51. Thus, the question before the court is whether the Lease, with an option to Purchase, entered into between Alston and Defendant "clearly evidences an intent to create a sealed instrument." Id. at 552. Upon review, the court concludes that the Lease does not evidence such an intent.
The court begins by looking at the prior cases in which the South Carolina Court of Appeals has found that non-sealed agreements evidenced the requisite intent to seal. First, in Treadaway v. Smith, 479 S.E.2d 849 (S.C. Ct. App. 1996), the Court of Appeals determined that the inclusion of the attestation clause-"IN WITNESS WHEREOF, the parties have hereunto set their respective Hands and Seals in quadruplicate"—along with the additional statement "SIGNED SEALED AND DELIVERED" in a separation agreement entered into by former spouses was evidence of an intent to create a sealed instrument. Id. at 855.
Similarly, in South Carolina Department of Social Services v. Winyah Nursing Homes, Inc., 320 S.E.2d 464 (S.C. Ct. App. 1984), the Court of Appeals likewise found the requisite intent to create a sealed instrument where the attestation clause stated that "the parties hereto have set their hands and seals" and was followed by the notation "L.S." adjacent to the contracting parties' signatures.
However, also in Carolina Marine Handling, Inc., the Court of Appeals determined that a non-sealed lease lacked evidence of an intent to create a sealed instrument. Id. at 551. In that case, the lease contained only the "standard" attestation clause—"IN WITNESS WHEREOF, the parties have hereunto set their hands and seals"—and the court concluded as follows:
Id. at 552.
Here, in the case sub judice, the court concludes that the parties did not intend to create a sealed instrument. Although "[t]he sophisticated parties to th[e] [L]ease [] could have easily manifested an intent to create a sealed instrument if they were so inclined," id. at 551, they failed to do so in this instance. As an initial matter, the body of the Lease lacks any express language indicating that it is to be treated as a sealed instrument. Moreover, in each of the above-cited cases in which South Carolina courts have found the requisite intent to seal, the instrument in question contained multiple indicia to evidence such intent. Specifically, in both Treadaway and Winyah Nursing Homes, Inc., the instrument in question contained an attestation clause stating that the parties had "set their hands and seals,"
Plaintiff alternatively argues that the statute of limitations has not expired because this action arises out of an interest in land. (See Plf Resp. in Opp. at 11.) Plaintiff's argument relies on S.C. Code § 15-3-350, which provides a ten-year statute of limitations for "[a]ction[s] founded on title or for rents or services." That section specifically provides the following:
S.C. Code § 15-3-350. Upon review, however, the court concludes that Plaintiff's claim does not arise out of an interest in land.
Plaintiff argues that Jenkins v. Brown, 532 S.E.2d 302 (S.C. Ct. App. 2000), a South Carolina Court of Appeals case, supports a finding that Plaintiff's claim is governed by § 15-3-350's ten-year statute of limitations. The court disagrees. In Jenkins, the Court of Appeals determined that the ten-year statute of limitations applied to an action regarding the ownership rights to a tobacco allotment after its sale by a life-tenant. Jenkins, 532 S.E.2d at 303. In concluding that the ten-year statute of limitations applied, the Court of Appeals specifically noted "the historical precept that farm allotments run with the land." Id. at 305. Importantly, in our case, the title and ownership of the property in question are not in dispute. As a matter of fact, Plaintiff has provided the court with a copy of the Deed showing that Defendant transferred title to Plaintiff on November 23, 2005. (See Deed at 1-2.) Thus, the court concludes that Plaintiff's reliance on Jenkins is misplaced.
On the other hand, however, the court does find telling the South Carolina Court of Appeals' more recent decision in Palmetto Co. v. McMahon, 716 S.E.2d 329 (S.C. Ct. App. 2011). In Palmetto Co., the Court of Appeals had to determine which statute of limitations-§ 15-3-530(1)'s three-year statute of limitations or § 15-3-350's ten-year statute of limitations-applied to an action "for collection of rent by distraint" for rent owed under a lease agreement. Id. at 330. The Court of Appeals began by noting that "[a] lease agreement is a contract," and further that "[s]ection 15-3-530(1) of the South Carolina Code [] provides the statute of limitations for an action upon a contract is three years." Id. at 331 (internal quotations and citations omitted). Ultimately, the Court of Appeals concluded that "[a]lthough Palmetto Company titled its action as one for distraint, its claim for rent arose out of the lease, not its title to real property. Because a lease is a contract, the three-year statute of limitations applies." Id.
Here, the dispute arises out of the Lease, with an option to Purchase, entered into between Alston and Defendant, and the alleged oral modification thereto regarding fire insurance. Therefore, just as in Palmetto Co., because the claim arose out of the Lease, and not the title to the property in question, § 15-3-350's ten-year statute of limitations does not apply. Rather, because the Lease is a type of contract, § 15-3-530(1)'s three-year statute of limitations applies. Assuming as true all of Plaintiff's allegations, the court is not unsympathetic to the situation in which Gloria Alston and Plaintiff find themselves. Statutes of limitation can render harsh results, but this court sitting in diversity cannot ignore them. Plaintiff's own allegations reveal that this case is nothing more than a dispute over the Lease and the proceeds of a fire insurance policy taken out by the parties pursuant to an alleged oral modification to the Lease. Ultimately, the court concludes that Plaintiff's claims are subject to § 15-3-530(1)'s three-year statute of limitations and are time-barred under the same.
Based on the foregoing, it is therefore
Carolina Marine Handling, Inc., 609 S.E.2d at 174 n.3.
