January 16, 2019
From Beaufort County Carmen T. Mullen, Circuit Court Judge
A. Speights and Algernon Gibson Solomons, III, both of
Speights & Solomons, LLC, of Hampton, for Appellants.
Hamlin O'Kelley, III, of Buist, Byars & Taylor, LLC,
of Mt. Pleasant, for Respondent.
property dispute, Appellants William and Leslie Loflin
challenge the circuit court's order granting summary
judgment to Respondent Chicago Title Insurance Company
(Chicago Title) on Appellants' breach of contract claim
against Chicago Title. Appellants argue the circuit court
erred by (1) concluding that the coverage of the title
insurance policy issued by Chicago Title (the Policy) was
limited to defects of record; (2) finding there were no
defects in Appellants' title when the Policy was issued;
and (3) concluding that their breach of contract claim
against Chicago Title was barred by the statute of
limitations. We reverse and remand for a trial on the merits.
September 26, 2000, Appellants purchased an interest in
Defendant BMP Development, LP (Balsam), f/k/a Balsam Mountain
Preserve, Limited Partnership, which was formed for the
purpose of developing Balsam Mountain Preserve as a
residential community in Jackson County, North
Carolina. Balsam Mountain Company, LLC served as the
general partner, and Appellants were two of several limited
partners. Although Balsam was a foreign entity, its promoter,
Chaffin/Light Associates, had its principal place of business
in Beaufort County and was doing business in Beaufort County
"and throughout South Carolina." Chaffin/Light had
previously formed and managed three developments in Beaufort
County, i.e., Spring Island, Callawassie, and Chechessee
Creek Club, and, through Balsam Mountain Preserve, sought to
replicate Spring Island "on higher ground."
arranged for each "Founding Limited Partner" to
enter into a Reservation Agreement to acquire the right to
select and purchase a lot, a/k/a Homestead, in the
development. Appellants entered into their Reservation
Agreement on October 19, 2001, acquiring the right to
purchase Balsam Mountain Preserve Homestead Number 108 (Lot
108), which was located on a mountainside in Phase I of the
development. At that time, Lot 108 was not staked, but Balsam
advised Appellants that the lot was approximately 1.9 acres
and was circumnavigated by Balsam Mountain Preserve Road
February 15, 2002, Appellants purchased Lot 108 for $495,
000. On February 19, 2002, Chicago Title issued the Policy to
insure Appellants' title to Lot 108, described in the
Policy as "containing 1.837 acres, as shown on that
certain plat dated the 10th day of December, 2001,
prepared by Herron Land Surveying, certified by James Randy
Herron, Professional Land Surveyor ( N.C. #3202), and
recorded in the Jackson County Records in Plat Cabinet 11 at
Slide 383." According to Appellants, the December 10,
2001 plat indicated Lot 108 was 1.837 acres and represented
Preserve Road as circumnavigating the lot, and the recorded
deed to Lot 108 incorporated this plat.
2006, Balsam's President and CEO, Craig Lehman, advised
Appellants that the size of Lot 108 was merely 1.4 acres and
that Preserve Road traversed the property rather than
circumnavigating it. At that time, Lehman was not aware that
there was a second, unrecorded plat of Lot 108 reflecting the
features described by Lehman or that the plat was prepared
before the 2002 closing on the lot. Appellants believed from
their discussions with Balsam that the second plat had been
prepared sometime after the 2002 closing and that the
Preserve Road encroachment was an "after purchase
unrecorded plat, which is dated February 6, 2002, indicates
in dotted lines those boundary lines from the "original
configuration" that bordered the acreage being shaved
off the lot for a newly configured lot. The 2002 plat noted
the date for the original configuration as December 10, 2001.
The plat also shows Preserve Road traversing the northeastern
part of the original configuration and a small area of the
northwestern corner of the original configuration. Randy
Herron, who had prepared the December 10, 2001 plat, also
prepared the 2002 plat. He indicated that he delivered the
2002 plat to Balsam on or about February 6, 2002.
notifying Appellants of their reduced acreage, Balsam asked
Appellants to sign a quitclaim deed reflecting the reduced
size of Lot 108 and Preserve Road running through the
original configuration of the lot as shown in the second
plat, but Appellants refused to do so. From that point
forward, Balsam and its successor in interest, Balsam
Mountain Group, LLC (BMG),  exercised control over Preserve
Road and the .437 acres in dispute. In early 2012, Appellants
discovered that the unrecorded plat had been prepared for
Balsam two weeks before the 2002 closing and, thus, Preserve
Road actually encroached on the original configuration of Lot
108 before the closing.
Appellants submitted a claim to Chicago Title based on
Balsam's and BMG's reliance on the unrecorded plat,
but Chicago Title denied the claim on August 21, 2012. On
July 18, 2013, Appellants filed this action against Balsam
Mountain Preserve Community Association (the Association),
Chicago Title, and Counsellor Title Agency, Inc. (Counsellor
Title), Chicago Title's agent, asserting causes of action
for Continuous Trespass (as to the Association), Encroachment
(as to the Association), and Breach of Contract (as to
Chicago Title and Counsellor Title). Appellants also
commissioned a new survey to confirm that Preserve Road
traversed the 1.837 acres they purchased. This plat is dated
April 8, 2014, and shows Preserve Road traveling in a winding
path from the southeastern part of the lot to its
northeastern part but not touching on the northwestern corner
as shown in the February 2002 unrecorded plat.
April 14, 2014, Appellants filed an Amended Complaint
substituting Balsam for the Association, alleging that Balsam
was the alter-ego of the Association, and adding the
following causes of action against Balsam: Fraud, Negligent
Misrepresentation, Rescission, Breach of Contract,
"Breach of Contract with Fraudulent Intent Accompanied
by Fraudulent Act," Breach of Fiduciary Duty,
Conversion, Unjust Enrichment, Accounting, and
Indemnification. As to Chicago Title and Counsellor Title,
the Amended Complaint asserted causes of action for Breach of
Contract and Negligence.
April 16, 2014, Chicago Title filed a motion to dismiss the
Amended Complaint, which the Honorable Ernest Kinard denied
on September 3, 2014. Counsellor Title also filed a motion to
dismiss the Amended Complaint on April 28, 2014, and Judge
Kinard denied this motion as well. Subsequently, Chicago
Title filed its Answer and asserted several affirmative
defenses, including the statute of limitations.
then filed their Second Amended Complaint on January 6, 2015,
to (1) add as defendants BMG and the law firm of Coward,
Hicks & Siler, P.A. and J.K. Coward, Jr., the attorney
who represented Appellants in their purchase of Lot 108
(collectively, the Coward defendants), and (2) add a cause of
action for Successor Liability (as to BMG) and numerous
causes of action against the Coward defendants.
2015, Chicago Title and Counsellor Title filed their
respective motions for summary judgment, and Appellants filed
a Third Amended Complaint on August 5, 2015. The Honorable
Carmen Mullen conducted a hearing on Chicago Title's
summary judgment motion on June 13, 2016. Judge Mullen issued
an order granting the motion on August 25, 2016.
order, Judge Mullen concluded (1) Appellants' action was
barred by the three-year statute of limitations set forth in
section 15-3-530 of the South Carolina Code; (2) the February
2002 plat did not have any impact on Appellants' title to
Lot 108 because this plat was unrecorded and pursuant to
North Carolina statutory law, "unrecorded interests in
land are invalid against subsequent purchasers of
property"; (3) none of the Policy's "Covered
Title Risks" were triggered by Appellants'
allegations or evidence; (4) no defects in title were in
existence when Chicago Title issued the Policy; and (5) there
was no evidence of any negligence on the part of Chicago
Title because no title search would have revealed the second,
unrecorded plat. This appeal followed.
1. Did the circuit court err by concluding that the
Policy's coverage was limited to defects of record?
2. Did the circuit court err by finding there were no defects
in title when the Policy was issued?
3. Did the circuit court err by concluding that the breach of
contract claim against Chicago Title is barred by the statute
court reviews the grant of a summary judgment motion under
the same standard applied by the trial court pursuant to Rule
56(c), SCRCP. Jackson v. Bermuda Sands, Inc., 383
S.C. 11, 14 n.2, 677 S.E.2d 612, 614 n.2 (Ct. App. 2009).
Rule 56(c), SCRCP, provides that summary judgment shall be
granted when "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law." "In determining
whether any triable issues of fact exist, the evidence and
all the inferences [that] can be reasonably drawn from the
evidence must be viewed in the light most favorable to the
nonmoving party." Hancock v. Mid-S. Mgmt. Co.,
381 S.C. 326, 329-30, 673 S.E.2d 801, 802 (2009); Fleming
v. Rose, 350 S.C. 488, 493-94, 567 S.E.2d 857, 860
judgment should not be granted even when there is no dispute
as to evidentiary facts if there is disagreement concerning
the conclusion to be drawn from those facts." Lanham
v. Blue Cross & Blue Shield of S.C., Inc., 349 S.C.
356, 362, 563 S.E.2d 331, 333 (2002). "On appeal from an
order granting summary judgment, the appellate court will
review all ambiguities, conclusions, and inferences arising
in and from the evidence in a light most favorable to the
non-moving party below." Id.
"in cases applying the preponderance of the evidence
burden of proof, the non-moving party is only required to
submit a mere scintilla of evidence in order to withstand a
motion for summary judgment." Hancock, 381 S.C.
at 330, 673 S.E.2d at 803; see also Radcliffe v. S.
Aviation Sch., 209 S.C. 411, 420, 40 S.E.2d 626, 630
(1946) ("A scintilla of evidence is any
material evidence that, if true, would tend to establish
the issue in the mind of a reasonable jury." (emphasis
in original) (quoting In re Crawford, 205 S.C. 72,
30 S.E.2d 841, 849 (1944))); Bethea v. Floyd, 177
S.C. 521, 181 S.E. 721, 724 (1935) (defining
"scintilla" as the smallest trace). "At the
summary judgment stage of litigation, the court does not
weigh conflicting evidence with respect to a disputed
material fact." S.C. Prop. & Cas. Guar.
Ass'n v. Yensen, 345 S.C. 512, 518, 548 S.E.2d 880,
883 (Ct. App. 2001). Moreover, "[s]ummary judgment is
not appropriate where further inquiry into the facts of the
case is desirable to clarify the application of the
Scope of Coverage
assert the circuit court erred by concluding that the
Policy's coverage was limited to defects of record. At
oral argument, Chicago Title conceded this point, and we
order, the circuit court concluded that the "unrecorded
plat cannot create any encumbrance and cannot create any
damages for [Appellants] by [Chicago Title] as it has no
impact upon [Appellants'] title to their property."
The circuit court also concluded,
There is simply no breach by Chicago Title as [Appellants]
received the title referenced in both their recorded deed and
the [r]ecorded [p]lat referenced in that deed.
None of the enumerated "Covered Title Risks" in the
Policy are triggered by [Appellants'] allegations related
to the unrecorded plat or by any evidence presented to this
[c]ourt . . . .
begin our analysis by referencing case law concerning the
construction of insurance policies.
Insurance policies are subject to the general rules of
contract construction. The cardinal rule of contract
interpretation is to ascertain and give legal effect to the
parties' intentions as determined by the contract
language. Courts must enforce, not write, contracts of