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Gordon v. Lancaster

Supreme Court of South Carolina

November 21, 2018

Frank Gordon, Jr., Individually and as Trustee of Dorothy S. Gordon (Deceased) Trust, Respondent,
Donald W. Lancaster, Petitioner. Appellate Case No. 2017-000640

          Heard June 14, 2018


          Appeal from Charleston County J. C. Nicholson, Jr., Circuit Court Judge

          Stephen P. Groves, Sr. and Alexandra H. Austin, both of Nexsen Pruet, LLC, of Charleston, and John J. Dodds, III, of The Law Firm of Cisa & Dodds, LLP, of Mt. Pleasant, all for Petitioner.

          Justin O'Toole Lucey and Stephanie D. Drawdy, of Justin O'Toole Lucey, P.A., of Mount Pleasant, for Respondent.


         We granted certiorari on the narrow question of whether a creditor may execute on a judgment more than ten years after its enrollment when the time period has expired during the course of litigation. Our resolution of this case requires us to revisit our decision in Linda Mc, [1] which the court of appeals broadly interpreted as extending a judgment's life beyond the statutory ten-year limit merely by filing the action within ten years. Gordon v. Lancaster, 419 S.C. 48, 795 S.E.2d 857 (Ct. App. 2016). We reverse and overrule Linda Mc.


         In December of 2001, Rudolph Drews, the now-deceased uncle of Petitioner Donald Lancaster, was found liable in a civil action for violating securities laws in an investment scheme for a new business venture in Charleston. Judgment was enrolled against Drews in March of 2002; over the next three years, the court of appeals affirmed and this Court denied certiorari. Thereafter, in August of 2006, Respondent Frank Gordon, a creditor on the 2002 judgment, filed a petition in the circuit court for supplemental proceedings. The court granted the petition, and a hearing ensued one month later, wherein Gordon's counsel became suspicious that Drews' wife and Lancaster were complicit in shielding Drews' assets from creditors. Gordon noted, "[Drew's wife] is intertwined in this, and we believe the nephew is, too, by these gifts." This hearing was continued when Drews failed to produce tax and financial documents.

         A year later, in September of 2007, Rudolph Drews died, and his estate was opened shortly thereafter. Gordon sought to continue supplemental proceedings, but delays in administering the estate arose. In February of 2010, Lancaster was deposed as part of supplemental proceedings, which confirmed Gordon's suspicions that he and Drews' wife were involved in shielding Drews' assets. Soon after, one day before her scheduled deposition, Drews' wife died.

         On November 2, 2010, Gordon filed this action, asserting Lancaster assisted Drews in hiding assets from creditors in violation of the Statute of Elizabeth.[2] A year later, in November of 2011, Drews' estate confessed judgment of $293, 703.43, and his wife's estate settled with Gordon for $60, 000. Both estates assigned their interests to him.

         A two-day bench trial occurred in June of 2013, wherein Lancaster moved for a directed verdict based on Gordon's prior concession that this suit was based on the 2001 judgment. Therefore, according to Lancaster, because more than ten years had elapsed from the date the judgment was entered, the judgment's "active energy" had expired. The court disagreed, relying on this broad language in Linda Mc: "If a party takes action to enforce a judgment within the ten-year statutory period of active energy, the resulting order will be effective even if issued after the ten-year period has expired." Thus, the court denied the motion and found in favor of Gordon for $211, 677.30.

         Lancaster appealed to the court of appeals, and in a split decision, the majority, relying on Linda Mc, held the trial court correctly determined section 15-39-30 did not bar satisfaction of the 2001 judgment because Gordon had timely filed this action within the ten-year window and continued to pursue it. Gordon, 419 S.C. at 58, 795 S.E.2d at 862. The dissent found the facts here distinguishable from Linda Mc, noting" [Gordon] had only filed the present action in the circuit court and settled his allegations against the Drews' estates. Although [Gordon] filed this action prior to the expiration of the ten-year period, he was not 'merely waiting on the court's order regarding execution and levy....'" Id. at 63, 795 S.E.2d at 865 (Thomas, J., dissenting). Additionally, the dissent noted the merits hearing did not occur for over a year after the ten-year period expired, and therefore posited that extending Linda Mc "thwarts the public policy of this state that limits the life of a judgment to ten years." Id. at 64, 795 S.E.2d at 865. While Lancaster sought certiorari on multiple issues, this Court granted certiorari solely on whether the judgment retained "active energy" and thus, was enforceable.


         Does a judgment's ten-year "active energy" terminate when the judgment creditor's enforcement action remains untried when the ten-year period expires, or conversely, does a judgment creditor's mere institution of the enforcement action within ten years extend that ten-year period indefinitely until trial is held and a final order is issued?

         STANDARD ...

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