Justice BEATTY.
Appellant RFT Management Co., L.L.C. (RFT) brought this action against respondents Tinsley & Adams, L.L.P. and attorney Welborn D. Adams (collectively, Law Firm) based on their legal representation of RFT during the closing of its purchase of two real estate investment properties in Greenwood County. RFT alleged claims for (1) professional negligence (legal malpractice), (2) breach of fiduciary duty, (3) violation of the South Carolina Unfair Trade Practices Act
RFT is a limited liability company, with David Roatch (Roatch) as its managing member. This action arises out of RFT's purchase of two parcels of property in a residential community near Lake Greenwood known as Planters Row at Palmetto Crossing.
Planters Row was developed by Lake Greenwood Developers, L.L.C. (Developer), which was managed by William Gilbert (Gilbert). The subdivision had 65 lots, and in order to generate sales activity, Developer initially offered "discounts" of from five to ten percent of the purchase price to some buyers, as well as buy-back options in which it agreed to repurchase the lots. The repurchase option was to be exercised
On September 25, 2007, RFT entered into agreements to purchase lots 28 and 31 in Planters Row from Developer, for a total purchase price of $570,000 ($290,000 for lot 28 and $280,000 for lot 31). At the time of the sales agreements with RFT, Developer did not own lots 28 and 31. Developer had previously sold lot 28 to Christopher and Susan Grimshaw and had sold lot 31 to Douglas Robertson.
In conjunction with these sales to the Grimshaws and Robertson, Developer had executed contemporaneous agreements to buy back the lots within a specified time period, and the Grimshaws and Robertson had notified Developer that they wished to exercise their options to sell their properties back to Developer. Developer, however, advised the buyers shortly before the scheduled closings that it did not have the funds to repurchase the properties, and it negotiated an extension of time.
Meanwhile, on October 30, 2007, RFT and Developer signed a buy-back agreement regarding lots 28 and 31 in conjunction with RFT's purchase of the two lots. RFT had retained Joe Maddox, a Spartanburg attorney, to review the agreements concerning the purchase of the lots and the buy-back. Maddox negotiated directly with Gilbert and, at the suggestion of Maddox, RFT additionally obtained a second mortgage on the 21 unsold lots in the subdivision in order to secure payment in the event RFT exercised its rights under the buy-back agreement.
Law Firm handled the majority of the real estate closings for Developer, and the closings were usually the responsibility of attorney Welborn D. Adams (Adams). Adams was the closing attorney for the transaction with RFT. Adams coordinated the scheduling of the closings in order to accomplish the repurchases of the two lots from the prior owners and the sale to RFT. RFT's contract for legal services with Law Firm stated Law Firm was being retained solely to perform the ministerial acts associated with the closing:
The closing with RFT took place on October 30, 2007.
RFT filed a complaint against Law Firm on October 20, 2008, in which RFT asserted claims for legal malpractice, breach of fiduciary duty, and violations of the UTPA and SCUSA. At trial, RFT's claims centered on its allegations that it was unaware of the status of the lots, that Law Firm engaged in deceptive acts regarding the true owners of the property, and that it suffered damages because its investment properties had a markedly lower value than anticipated.
At the close of all the evidence, the trial court "merged" RFT's breach of fiduciary duty claim into its claim for legal malpractice and granted Law Firm's motions for a directed verdict on RFT's UTPA and SCUSA claims. Thus, only the claim of legal malpractice went to the jury, which returned a verdict in favor of Law Firm. The trial court denied RFT's post-trial motions.
On appeal, RFT contends the trial court erred in (1) failing to grant its motion for judgment notwithstanding the verdict (JNOV) or a new trial on the issue whether Law Firm engaged in malpractice by representing both RFT and the seller at the closing since there was an unwaivable conflict of interest; (2) failing to grant its motion for JNOV or a new trial on the issue whether Law Firm engaged in malpractice by failing to disclose materials facts, submitting false and misleading documents, and/or arranging the closing as an unlawful "flip transaction"; (3) failing to charge the jury on breach of fiduciary duty and merging this cause of action with its first cause of action for legal malpractice; (4) directing a verdict in favor of Law Firm on RFT's UTPA claim; and (5) directing a verdict in favor of Law Firm on RFT's claim for aiding and abetting a SCUSA violation.
RFT first contends the trial court erred in denying its motion for a JNOV on its claim of legal malpractice because Law Firm committed malpractice as a matter of law. Alternatively, RFT argues the trial court erred in denying its request for a new trial on this claim.
A plaintiff in a legal malpractice action must establish four elements: (1) the existence of an attorney-client relationship, (2) a breach of duty by the attorney, (3) damage to the client, and (4) proximate causation of the client's damages by the breach. Rydde v. Morris, 381 S.C. 643, 646, 675 S.E.2d 431, 433 (2009); Smith v. Haynsworth, Marion, McKay & Geurard, 322 S.C. 433, 435 n. 2, 472 S.E.2d 612, 613 n. 2 (1996).
A party making a motion for a directed verdict must state the specific grounds relied upon therefor, and the trial court may grant the motion when the case presents only issues of law. Rule 50(a), SCRCP. If the motion is denied, the party may thereafter move for a JNOV in order to have the verdict and judgment set aside and a judgment entered in accordance with the party's directed verdict motion. Rule 50(b), SCRCP. A motion for a new trial may be joined with the JNOV motion or prayed for in the alternative. Id.
"When a party fails to renew a motion for a directed verdict at the close of all evidence, he waives his right to move for JNOV." Wright v. Craft, 372 S.C. 1, 20, 640 S.E.2d 486, 496 (Ct.App.2006). Moreover, only the grounds raised in the directed verdict motion may properly be reasserted in a JNOV motion. In re McCracken, 346 S.C. 87, 551 S.E.2d 235 (2001); Gov't Emps. Ins. Co. v. Mackey, 260 S.C. 306, 195 S.E.2d 830 (1973). A motion for a JNOV is merely a renewal of the directed verdict motion. Wright, 372 S.C. at 20, 640 S.E.2d at 496.
When reviewing the trial court's ruling on a motion for a directed verdict or a JNOV, this Court must apply the same standard as the trial court by viewing the evidence and all reasonable inferences in the light most favorable to the nonmoving
The trial court must deny a motion for a directed verdict or JNOV if the evidence yields more than one reasonable inference or its inference is in doubt. Strange v. S.C. Dep't of Highways & Pub. Transp., 314 S.C. 427, 445 S.E.2d 439 (1994). Moreover, "[a] motion for JNOV may be granted only if no reasonable jury could have reached the challenged verdict." Gastineau v. Murphy, 331 S.C. 565, 568, 503 S.E.2d 712, 713 (1998). An appellate court will reverse the trial court's ruling only if no evidence supports the ruling below. Welch v. Epstein, 342 S.C. 279, 536 S.E.2d 408 (Ct.App.2000). In deciding such motions, neither the trial court nor the appellate court has the authority to decide credibility issues or to resolve conflicts in the testimony or the evidence. Id. at 300, 536 S.E.2d at 419.
We find RFT's argument that it is entitled to a judgment as a matter of law on its claim for legal malpractice to be without merit. As noted above, a motion for JNOV must be based on the same grounds as those raised in a motion for a directed verdict motion made at the close of all the evidence.
In reviewing the record, as an initial matter we agree with Law Firm that RFT did not move for a directed verdict on the legal malpractice claim based on the second ground it now urges on appeal, i.e., that this was an improper flip transaction and Law Firm gave misleading information while failing to make required disclosures. Thus, this argument is not properly before the Court. See Roland v. Palmetto Hills, 308 S.C. 283, 286 & 287 n. 2, 417 S.E.2d 626, 628 & n. 2 (Ct.App.1992) (stating "[a] motion for judgment notwithstanding the verdict is a renewal of the directed verdict motion and cannot raise grounds beyond those raised in the directed verdict" motion, and additionally noting that the burden was on the appellant to furnish a sufficient record on appeal to allow review).
As to RFT's first ground concerning whether there was an unwaivable conflict as a matter of law, RFT and Law Firm initially agreed this issue concerned a question of law, but then later during the parties' discussion Law Firm stated
To the extent RFT further argues on appeal that the trial court erred in denying its post-trial motion for a new trial on its legal malpractice claim, RFT has shown no error. RFT re-asserts the same grounds in its new trial request as for the JNOV and also asserts the trial court should have granted a new trial pursuant to the thirteenth juror doctrine.
The trial court denied RFT's request for a new trial on the legal malpractice action without specifying its grounds. See Miller v. Atl. Coast Line R.R. Co., 95 S.C. 471, 79 S.E. 645 (1913) (stating where an order denying a new trial motion does not specify the grounds for the decision, it will be affirmed on appeal if the record presents any grounds upon which the motion could have been properly refused).
In denying the JNOV on this claim, however, the trial court noted, inter alia, that the parties had agreed there were questions of fact regarding the legal malpractice claim and that the jury had properly considered the issue and reached a unanimous verdict. Since the trial court found there were questions of fact as to this claim and that RFT had not challenged this point, RFT has shown no error in the trial court's failure to grant its new trial motion based on the grounds asserted in its request for a JNOV and its allegation that the evidence does not support the verdict. See McEntire
As for RFT's new trial motion made pursuant to the thirteenth juror doctrine, the thirteenth juror doctrine is a vehicle by which the trial court may take its own view of the evidence and grant a new trial if it disagrees with the jury's verdict. Folkens v. Hunt, 300 S.C. 251, 387 S.E.2d 265 (1990). This is also called granting a new trial upon the facts, and the judge is not required to give the reasons for its ruling. Id. at 254, 387 S.E.2d at 267. The effect is the same as if the jury had failed to reach a verdict. Id. A trial court's order granting or denying a new trial upon the facts will not be disturbed unless the decision is wholly unsupported by the evidence or the conclusion reached is controlled by an error of law. Id. at 254-55, 387 S.E.2d at 267.
"The granting of a new trial upon the facts is not the equivalent of granting a directed verdict." McEntire, 353 S.C. at 632, 578 S.E.2d at 748. The question of whether the evidence is legally sufficient to sustain a verdict, a question of law, is distinguishable from the question of whether a fair preponderance of the evidence supports a verdict, which is a matter involving the exercise of discretion. Id. at 632-33, 578 S.E.2d at 748. Stated another way, a party's evidence might make a case one for the jury, but the evidence might be so outweighed by the countervailing evidence that, in the exercise of its discretion, a trial court could choose to set aside the verdict under the thirteenth juror doctrine. Id. at 633, 578 S.E.2d at 748 (citing Russell v. Pilger, 113 Vt. 537, 37 A.2d 403, 414 (1944)).
We hold RFT has shown no abuse of discretion. The scope of representation offered by Law Firm was strictly limited in the retainer agreement Law Firm had with RFT, and RFT's own real estate agent had knowledge of the October 30th title letter outlining the status of the properties. Thus, a jury could have properly found there was no deceitful action by Law Firm.
Having upheld the jury's determination that RFT failed to establish its claim of legal malpractice, we find RFT's remaining claims are precluded as a matter of law under the circumstances present here.
RFT contends the trial court erred in "merging" its second cause of action for breach of fiduciary duty with its first cause of action for legal malpractice. RFT asserts the trial court erroneously determined the breach of fiduciary claim was redundant.
"A confidential or fiduciary relationship exists when one imposes a special confidence in another, so that the latter, in equity and good conscience is bound to act in good faith and with due regard to the interests of the one imposing the confidence." Davis v. Greenwood Sch. Dist. 50, 365 S.C. 629, 635, 620 S.E.2d 65, 68 (2005). To establish a claim for breach of fiduciary duty, the plaintiff must prove (1) the existence of a fiduciary duty, (2) a breach of that duty owed to
A claim for breach of fiduciary duty, as a general matter, is distinguishable from a claim for legal malpractice because it can arise in contexts other than one involving an attorney-client relationship. See, e.g., In re Estate of Cumbee, 333 S.C. 664, 511 S.E.2d 390 (Ct.App.1999) (finding a fiduciary relationship existed where a son held his mother's power of attorney and managed all of her finances). In the current matter, however, RFT's claim for breach of fiduciary duty arose out of the duty inherent in the attorney-client relationship and it arose out of the same factual allegations. Thus, RFT's claim for legal malpractice necessarily encompassed a breach of the fiduciary duty an attorney has to his or her client. RFT specifically acknowledged at trial that it could not provide any circumstances differentiating the two claims.
Although RFT now argues a breach of fiduciary claim could be distinguishable from legal malpractice, RFT does not set forth any specific facts that demonstrate its breach of fiduciary duty claim is distinguishable because it arises out of a duty other than one created by the attorney-client relationship or because it is based on different material facts.
RFT next argues the trial court erred in granting a directed verdict to Law Firm on its UTPA claim on the basis the UTPA does not apply to the legal profession.
The UTPA declares "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are ... unlawful." S.C.Code Ann. § 39-5-20(a) (1985). "To recover in an action under the UTPA, the plaintiff must show: (1) the defendant engaged in an unfair or deceptive act in the conduct of trade or commerce; (2) the unfair or deceptive act affected [the] public interest; and (3) the plaintiff suffered monetary or property loss as a result of the defendant's unfair or deceptive act(s)." Wright v. Craft, 372 S.C. 1, 23, 640 S.E.2d 486, 498 (Ct.App.2006).
This Court has "interpreted this exemption to exclude from the UTPA those actions or transactions which are allowed or authorized by a regulatory agency or other statutes." Taylor v. Medenica, 324 S.C. 200, 218, 479 S.E.2d 35, 44 (1996) (citing Ward v. Dick Dyer & Assocs., 304 S.C. 152, 403 S.E.2d 310 (1991)). In Ward, the Court observed the purpose of the exemption is to avoid subjecting a business to a lawsuit for doing something required by law or allowed by a statute or a regulation; it is intended to avoid a conflict between laws, not to exclude coverage for every act that is authorized or regulated by another statute or agency, as virtually every activity is regulated to some degree. Ward, 304 S.C. at 156, 403 S.E.2d at 312 (citing Skinner v. Steele, 730 S.W.2d 335, 337 (Tenn.Ct. App.1987)).
We find the trial court erred in relying upon the regulated industries exception. See S.C.Code Ann. § 39-5-10(b) (1985) (defining "trade" and "commerce" in the UTPA as including the "sale or distribution of any services"); Taylor, 324 S.C. at 217, 479 S.E.2d at 44 (citing the statutory definitions in section 39-5-10(b) and holding "[t]he provision of any service constitutes commerce within the meaning of the UTPA"; the Court observed that "[t]he statute does not exclude professional services from its definition"); Camp v. Springs Mortgage Corp., 307 S.C. 283, 285, 414 S.E.2d 784, 786 (Ct.App.1991) ("There is no question but what legal services come within the definition of this [UTPA] statute."), aff'd in part, rev'd in part, 310 S.C. 514, 426 S.E.2d 304 (1993) (finding UTPA claim failed on the basis no unfair act was alleged); see also Pepper v. Routh Crabtree, APC, 219 P.3d 1017, 1024-25 (Alaska 2009) (holding the legal profession is not
Despite the trial court's error in finding the UTPA is not available against the legal profession, RFT has shown no reversible error in this regard. Because RFT alleged the same facts for its UTPA claim as in the legal malpractice claim, i.e., the deceptive acts of Law Firm, which the jury has already rejected, RFT has not shown it could have established all of the necessary elements of this claim. Cf. Hennes v. Shaw, 397 S.C. 391, 725 S.E.2d 501 (Ct.App.2012) (holding even if the circuit court erred in directing a verdict on the plaintiff's UTPA claim based on the regulated industries exemption in the UTPA, the plaintiff failed to demonstrate sufficient evidence on all of the elements of the claim, in particular, the plaintiff failed to demonstrate the defendant's actions adversely affected the public interest; thus, the circuit court's grant of a directed verdict on this claim was affirmed).
RFT's challenge to the trial court's grant of a directed verdict on its claim for aiding and abetting a securities violation similarly fails. In its complaint, RFT alleged its purchase of two investment lots with accompanying buy-back agreements constituted a "security" for purposes of the South Carolina Uniform Securities Act of 2005. RFT further alleged Law Firm was civilly liable for damages under S.C.Code Ann. § 35-1-509 (Supp.2011) for not disclosing that the two lots were subject to pre-existing buy-back agreements with prior owners and that Developer did not actually own the two lots at the time it arranged for the sale to RFT. RFT also alleged Law Firm did not exercise the reasonable due care owed to RFT as an investor because it allowed Developer's untruths about the financial stability of Planters Row, as expressed by William Gilbert, to go undiscovered.
Even assuming, without deciding, that the transaction qualified as a security, the securities claim was based on the same factual allegations that were ultimately rejected by the jury when it returned a verdict in favor of Law Firm on the legal malpractice claim. In addition, RFT absolved Law Firm of any potential liability resulting from an allegation of aiding and abetting a securities violation when RFT signed the retainer agreement with Law Firm that expressly limited the scope of its representation. In that agreement, RFT acknowledged that it was retaining Law Firm to close the transaction, prepare a deed of conveyance, and perform ministerial acts associated with the closing. RFT further acknowledged that it had not retained Law Firm to negotiate the contract and that it was not relying on Law Firm to provide substantive advice about the transaction. Consequently, there could be no liability, so we find no error in the granting of a directed verdict on this claim.
Based on the foregoing, we affirm the rulings of the trial court.
PLEICONES, Acting Chief Justice, KITTREDGE, HEARN, JJ., and Acting Justice CLIFTON NEWMAN, concur.
