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Gibson v. Andrew K. Epting, Jr., LLC

Court of Appeals of South Carolina

January 9, 2019

Linda A. Gibson, individually and in capacity as Trustee of the Paul William Gibson Family Trust; Heritage Seven, LLC; Seven Oaks Apartments, LLC; and 3205 Palm Boulevard, LLC, Appellants,
Andrew K. Epting, Jr., LLC; Andrew K. Epting, Jr.; George J. Kefalos, P.A.; George J. Kefalos; Gedney M. Howe, III, P.A.; Gedney M. Howe, III; John S. West, Attorney-at-Law, LLC; and John S. West, Respondents. Appellate Case No. 2016-000432

          Heard October 10, 2018

          Appeal From Charleston County R. Markley Dennis, Jr., Circuit Court Judge

          Thomas A. Pendarvis and Christopher W. Lempesis, Jr., both of Pendarvis Law Offices, PC, of Beaufort; and James R. Davis, of J. Davis Law Firm, P.C., of Daniel Island, for Appellants.

          M. Dawes Cooke, Jr. and Jeremy E. Bowers, both of Barnwell Whaley Patterson & Helms, LLC, of Charleston, for Respondents.

          HILL, J.

         Linda Gibson and several of her companies-Heritage Seven, LLC, Seven Oaks Apartments, LLC, and 3205 Palm Boulevard, LLC (collectively, Gibson)-appeal the circuit court order granting summary judgment to Andrew Epting, Jr., George J. Kefalos, Gedney M. Howe, III, John S. West, and their respective law firms (collectively, Respondents). We affirm.


         In 2007, Gibson retained a ReMax real estate broker to assist her in the purchase and management of an apartment complex. In 2008, she sued ReMax Professional Realty and the broker, alleging they committed various wrongs and torts related to the management. In late 2009, Gibson defaulted on a loan with Ameris Bank (Ameris), which was secured by a mortgage on several properties she owned, including the complex. When it appeared Gibson might have a lender liability claim against Ameris, her lawyer in the ReMax case withdrew due to a conflict of interest. Gibson then retained lawyer Robert L. Papa, who advised her she was not a candidate for bankruptcy and tried, unsuccessfully, to negotiate with Ameris. Papa approached Kefalos about representing Gibson on her issues with Ameris. Kefalos expressed interest in taking the case but asked that Epting also be brought on. After Gibson and Papa met with Kefalos and Epting, Papa advised them that Gibson wished to retain Kefalos to represent her in the ReMax case and Epting to represent her in negotiations with Ameris. Correspondence and discussions ensued between Epting and Papa concerning the fee structure. Epting emphasized Gibson might benefit from a contingency fee rather than an hourly rate given her financial stress, particularly if Ameris began a "protracted battle with no result certain" by suing for foreclosure. In April 2010, Gibson signed a contingency fee agreement that referenced a February 4 email she claims she did not receive or see.

         On June 14, 2010, Ameris sued Gibson, alleging she owed $2, 796, 466.75 plus interest on the loan and seeking foreclosure of the mortgage as well as a deficiency judgment. On July 9, 2010, Epting emailed Gibson asking permission to associate Howe and West for no additional fee. Epting also filed an answer and counterclaim on Gibson's behalf.

         Ameris sold the note on the apartment complex to Galt Valley, LLC, which was substituted for Ameris as the plaintiff in the foreclosure action. Ameris remained the defendant on Gibson's counterclaims. Galt Valley's counsel began negotiations with Epting and moved for appointment of a receiver. Respondents opposed the motion, and the Master-in-Equity later denied it after a hearing. Continuing to press for foreclosure, Galt Valley sent Epting a settlement offer, noting Gibson's potential exposure to a $1, 697, 678.10 deficiency judgment and offering to resolve the case by having Gibson deed them the collateral properties and sign a $1.5 million note. Epting rejected the offer on Gibson's behalf.

         Respondents asked Gibson to consult an independent lawyer to advise her on their calculation of the proposed fee, as well as the prospect of securing the fee by granting Respondents a mortgage on other property Gibson owned. Gibson chose Paul Tecklenburg, who had represented her and her family in the past, to review Respondents' proposals. On November 8, 2010, Galt Valley offered to accept the deeds to the collateral properties in lieu of foreclosure, waive any deficiency, and allow Gibson to retain her counterclaims against Ameris. Tecklenburg testified he knew the Galt Valley offer had either been made or was imminent, and he negotiated with Respondents to reduce the calculated fee from over $700, 000 to $566, 666.66. Tecklenburg then drafted the fee agreement that all parties signed on November 18, 2010, in which Gibson agreed to pay Respondents "[o]ne-third (1/3) of all sums saved from the deficiency amount claimed by Ameris, in the amount of $1, 700, 000."

         Gibson later settled the ReMax matter for $850, 000, and she paid the costs of the foreclosure case and the $566, 666.66 attorneys' fee out of these funds. Epting and Kefalos also tried Gibson's counterclaims against Ameris, receiving a judgment of over $2.9 million dollars. After Ameris appealed, Gibson engaged different counsel. This court reversed the judgment. See Gibson v. Ameris Bank, 420 S.C. 536, 538, 804 S.E.2d 276, 277 (Ct. App. 2017), cert. denied, SC Sup. Ct. Order dated Feb. 1, 2018.

         On July 30, 2013, Gibson brought this action against Respondents over the attorneys' fee in the foreclosure case. As amended, her complaint included causes of action for inter alia legal malpractice, breach of fiduciary duty, conversion, violation of the South Carolina Unfair Trade Practices Act (SCUTPA), fraud, rescission, and negligent misrepresentation. After a ...

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