Honorage Nursing Home of Florence, S.C., Inc. v. Florence Convalescent Center, Inc.
Docket: Nos. 2002-CP-21-120, 2002-CP-21-1058
Court: Court of Appeals of South Carolina; November 13, 2005; South Carolina; State Appellate Court
Honorage Nursing Home of Florence, South Carolina, Inc. appeals two decisions by the circuit court: (1) the vacating of a default judgment against Florence Convalescent Center, Inc. (FCC), and (2) the grant of summary judgment in favor of FCC. The appeal is affirmed.
Honorage initiated legal action against FCC for breach of lease concerning a nursing home building leased since 1975. In September 2000, FCC's President, Genevieve Powell, expressed the desire to terminate the lease and sell the nursing home’s furniture and fixtures to Honorage. This led to negotiations between the parties' attorneys, resulting in a sales agreement on December 29, 2000, which included the lease termination, forgiveness of rent for November and December 2000, Honorage’s assumption of property taxes, and a payment of $5,000 for FCC’s computer equipment.
Following this agreement, FCC vacated the premises on December 31, 2000, and Honorage began operating the nursing home on January 1, 2001. Honorage filed suit on January 25, 2002, claiming breach of lease and seeking overdue payments. Honorage also petitioned to serve FCC as it could not locate its registered agent. The circuit court allowed service under South Carolina law, but the order inaccurately specified the mailing address.
Honorage mailed the summons to its own address rather than FCC’s principal office, failing to notify Powell or FCC directly. A default judgment was entered against FCC on March 19, 2002, for $1,281,779, with a finding that FCC’s corporate veil was pierced, holding Powell personally liable, despite her not being a party in the original case.
Powell became aware of the original judgment when Honorage initiated a declaratory judgment action to collect damages. She subsequently filed a motion to set aside the entry of default against FCC, which the circuit court granted, along with a summary judgment for FCC regarding the damages. The court determined that Honorage had voluntarily terminated the lease on December 29, 2000, which meant FCC did not breach the agreement. Honorage then appealed.
Honorage contended that the circuit court erred in setting aside the default against FCC. However, the court found that relief from a final judgment under Rule 60(b), SCRCP, is permissible if the moving party shows that the judgment was induced by mistake, inadvertence, surprise, or excusable neglect. The circuit court has discretion in this matter, and its decisions are upheld unless there is an abuse of that discretion.
Honorage failed to adhere to section 15-9-210(c) regarding service of process, which mandates that the summons and complaint be sent to the principal office's address as listed in the corporation's last annual report. FCC's last report indicated its service address, but Honorage did not serve FCC there, resulting in FCC not being notified of the action. The court deemed Honorage's attempts to serve FCC improper, particularly because Honorage's attorney misrepresented efforts to locate FCC's registered agent, who had been deceased for nearly twenty years. The circuit court acted within its discretion in setting aside the judgment against FCC under Rule 60(b).
Furthermore, regarding the summary judgment, the court applied the standard that summary judgment is appropriate when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law.
In assessing the existence of triable issues of fact, all evidence and reasonable inferences must be viewed favorably towards the nonmoving party. On appeal regarding summary judgment, ambiguities and inferences are also evaluated in this light. Honorage contends that the circuit court incorrectly granted summary judgment to FCC concerning a lease breach, arguing the lease termination was invalid under the Statute of Frauds. However, the Statute only necessitates a written memorandum identifying the contract's subject matter and essential terms, not a formally executed contract. A letter from Honorage’s attorney, Porter Stewart, detailed the sales agreement and included provisions for lease termination, which was approved by Howard Clarke, demonstrating compliance with the Statute of Frauds. Additionally, even if the letter were deemed insufficient, the part performance exception would apply, as both parties acted on the sales agreement, with FCC vacating the premises and Honorage taking possession. Consequently, the circuit court correctly determined that no genuine material fact issues existed regarding the lease termination, leading to FCC’s entitlement to summary judgment. The court's decision to grant summary judgment in favor of FCC is affirmed.
