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Centennial Casualty Co., Inc. v. Western Surety Co.

Court of Appeals of South Carolina

May 21, 2014

Centennial Casualty Co., Inc., Respondent,
v.
Western Surety Company, d/b/a CNA Surety, Appellant. Western Surety Company, d/b/a CNA Surety, Defendant/Third-Party Plaintiff,
v.
Charleston Auto Auction, A3 Auto Center, LLC, and Wylie Mickle, Third-Party Defendants

Heard May 7, 2014

Appeal From Charleston County. Appellate Case No. 2013-001381. J. C. Nicholson, Jr., Circuit Court Judge.

S. Markey Stubbs, of Baker Ravenel & Bender, LLP, of Columbia, for Appellant.

Ian S. Ford, of Ford Wallace Thomson LLC, of Charleston, for Respondent.

LOCKEMY, J. WILLIAMS and KONDUROS, JJ., concur.

OPINION

[408 S.C. 555] LOCKEMY, J.

Western Surety Co., d/b/a CNA Surety, argues the circuit court erred in (1) finding

Page 917

Charleston Auto Auction (CAA) and its insurance carrier, Centennial Casualty Co. (Centennial), were " legal representatives" pursuant to section 56-15-320(B) of the South Carolina Code; (2) finding section 56-15-320(B) applies when fraud is committed by either the seller or the purchaser of a motor vehicle; and (3) failing to address whether CAA was also the legal representative for the purchasing dealer, and if so, was a participant in the fraud. We reverse.

FACTS/PROCEDURAL BACKGROUND

CAA is a wholesale auctioneer that facilitates the sale and purchase of automobiles among dealers. According to its general manager, CAA (1) acts as the agent and legal representative for dealerships in the transactions; (2) collects and conveys the funds for the automobiles; and (3) conveys, but does not assume, the title to the automobiles between the parties. Section 56-15-320(B) of the South Carolina Code requires motor vehicle wholesalers and dealers to obtain a bond in order to indemnify

[408 S.C. 556] for loss or damage suffered by an owner of a motor vehicle, or his legal representative, by reason of fraud practiced or fraudulent representation made in connection with the sale or transfer of a motor vehicle by a licensed dealer or wholesaler or the dealer's or wholesaler's agent acting for the dealer or wholesaler or within the scope of employment of the agent or loss or damage suffered by reason of the violation by the dealer or wholesaler or his agent of this chapter.

S.C. Code Ann. § 56-15-320(B) (Supp. 2013) (emphasis added). Before CAA will facilitate sales of automobiles, dealers must enter into an agreement with CAA stating CAA is their legal representative in the transaction.

In March 2008, A3 Auto Center (A3), an automobile dealer, purchased three vehicles using CAA. Each vehicle's bill of sale stated: " Seller and Buyer each appoint [CAA] as their agent and legal representative for the purpose of processing this transaction through [CAA] . . . ." Pursuant to the ...


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