November 8, 2018
from Charleston County Stephanie P. McDonald, Circuit Court
OF CERTIORARI TO THE COURT OF APPEALS
L. Fairbanks, of The Law Offices of Philip Fairbanks, PC,
Kathy D. Lindsay, of Kathy D. Lindsay, PA, and Frederick M.
Corley, all of Beaufort, for Petitioner.
Stephen Lynwood Brown, Russell Grainger Hines, and Perry
McPherson Buckner IV, all of Young Clement Rivers, LLP, of
Charleston, for Respondent.
case concerns when a claim for deficient notice of
disposition of collateral under Article 9 of the Uniform
Commercial Code accrues for statute of limitation purposes.
The circuit court held the limitations period began upon
receipt of the allegedly deficient notice, and the court of
appeals affirmed in a split decision. Delaney v. First
Fin. of Charleston, Inc., 418 S.C. 209, 791 S.E.2d 546
(Ct. App. 2016). We hold the limitations period begins only
upon disposition; accordingly, we reverse.
October of 2007, Petitioner Otha Delaney bought a 2003
Chevrolet pickup truck from Coliseum Motors pursuant to a
retail installment sales contract. The dealership
subsequently assigned the contract to Respondent First
Financial of Charleston, Inc., which acquired a security
interest under the UCC. After Delaney failed to make
payments, First Financial lawfully repossessed the truck, and
on May 2, 2008, it sent Delaney a letter entitled,
"Notice of Private Sale of Collateral." Over seven
months later, on December 15, 2008, First Financial sold the
October 3, 2011, more than three years after sending notice
but less than three years from the sale of the truck, Delaney
filed suit against First Financial, seeking to represent a
class of individuals who had received notice that allegedly
failed to comply with certain requirements in Article 9.
Accordingly, Delaney asserted he was entitled to the
statutory penalty under section 36-9-625(c)(2) of the South
Carolina Code (2003). First Financial moved to dismiss
pursuant to Rule 12(b)(6), SCRCP, asserting the statute of
limitations had expired. Before the trial court, the parties
disputed whether the appropriate limitations period was one,
three, or six years.
hearing, the trial court found: (1) the remedy Delaney sought
pursuant to section 36-9-625(c)(2) was a statutory penalty;
(2) the six-year Article 2 limitations period did not apply
because Delaney failed to plead breach of contract, the claim
solely concerned deficient notice under Article 9, and even
if Article 2 applied, the more specific limitations period on
penalties governed; and finally, (3) under either limitation
period, Delaney's claim was time-barred as his action
accrued upon receipt of the allegedly deficient notice.
court of appeals affirmed in a split decision, holding that
because the claim concerned deficient notice, it accrued upon
receipt of the notice. Delaney, 418 S.C. at 222, 791
S.E.2d at 552. Concluding Delaney's claim was untimely
under either the one or three-year limitations period for an
action upon a statutory penalty, the court affirmed.
Id. at 222, 791 S.E.2d at 552. Judge Thomas
concurred in the majority's decision that Article 2's
six-year limitations period did not apply, but dissented on
the issue as to when Delaney's cause of action accrued,
finding that it accrued upon disposition of the collateral.
Id. at 222, 791 S.E.2d at 552-53 (Thomas, J.,
dissenting). Delaney sought a writ of certiorari, which we
the statute of limitations for an Article 9 deficient notice
of disposition of collateral claim begin to when notice is