Should limitations be imposed on the use of mascots?
One South Carolina law firm claims to have been unfairly targeted
Left Shark Law?
Several news sources (The Post and Courier, The State, AP News) have recently published stories involving a South Carolina law firm with a mascot problem.
According to the news reports, South Carolina attorney John Hawkins said he has been unfairly targeted by the Office of Disciplinary Counsel because of his law firm’s mascot, a hawk. You have probably seen the television ads showing the hawk and actors flapping their arms like hawks to promote the firm’s personal injury practice.
Hawkins has purportedly sued the ODC in Federal Court complaining that the ODC has reached a settlement with another legal entity that uses a tiger as a mascot for a national network of motorcycle accident attorneys styled “Law Tigers.”
Mr. Hawkins has complained in court filings that his mascot is a three-pound bird that eats mice, squirrels, and other small animals, while Law Tiger’s mascot is a 400-plus pound animal that mauls, attacks and eats people. Which mascot, he questions, unfairly represents the ability to “obtain results” in the personal injury arena?
The news reports indicate that two rival law firms and a former employee all filed complaints with the ODC about the hawk mascot in 2017. This year, the ODC filed formal disciplinary charges.
Hawkins’ lawsuit purportedly makes constitutional arguments against the ODC’s enforcement action. I’m not a litigator, but it seems to me that the place to make this argument is in the disciplinary action itself. It never occurred to me that the ODC could be sued in Federal Court.
What do you think, dirt lawyers? Will that suit be dismissed? Can advertising using mascots unfairly tout a law firm’s strength and ability? Are potential clients confused or unduly influenced by the use of mascots? It will be interesting to see how this story plays out.
Real estate practitioners don’t often get excited about litigation, but this lawsuit should bring cheers from dirt lawyers in every part of the Palmetto State! The Finkel Law Firm, LLC, as plaintiff, filed suit on November 24 against Michael Miller, individually and in his official capacity as the Charleston County Register of Deeds. You can read the complaint in its entirety here.
The complaint points to Miller’s chronic and willful failure to timely record real estate documents within one month of delivery. The allegations state that Miller has allowed substantial delays since late 2019, and that these delays have increased significantly in 2021, sometimes amounting to as long as four months.
Further, the complaint states the Charleston ROD routinely files documents that are hand delivered immediately while allowing hundreds or even thousands of documents delivered to his office by mail or parcel delivery to be stored for later filing.
We all know that South Carolina is a race notice state. Delay in filing real estate documents will, of course, create liability for parties and their lawyers. The complaint makes this point clearly.
The law firm alleges that these failures have substantially interfered with its ability to meet its professional obligations to protect the interests of its clients and has exposed the firm to potential liability for correcting title problems resulting from the ROD’s dereliction of duty.
The complaint seeks a writ of mandamus ordering the ROD:
To immediately file all real estate documents that have been delivered and have not been filed within one month of delivery;
To mark the recorded real estate documents as being recorded on the same date that they were delivered; and
To record all real estate documents in the order of the times at which they were brought to the ROD, regardless of whether they are personally delivered or are delivered by U.S. mail or parcel post.
The complaint asks the court to maintain jurisdiction for a reasonable time to monitor the continued operations of the ROD.
Every real estate practitioner in South Carolina should thank their friends at the Finkel Firm for taking this action. And every ROD in the State should take notice!
Court of Appeals holds the City is not responsible
On November 10, the South Carolina Court of Appeals affirmed a summary judgment order in favor of the City of Columbia concerning the alleged destruction of an archeological and historical bridge abutment during a sewer rehabilitation project*.
The Brinkmans, Colemans, Fosters and Collins (property owners) own real estate on Castle Road on the banks of the Broad River in Richland County. The City of Columbia owns and operates sewer lines that run beneath portions of the property and has a permanent, 15-foot easement across the property for the purpose of maintaining the sewer lines. In 2014, the City began a sewer rehabilitation project which required access to the sewer lines.
According to the property owners, two bridge abutments stood on their property located outside the easement. The owners claim these abutments, which were made of carved rock, were built in the 1700s and were the “oldest existing structures in the Midlands.”
One of the owners testified that he shouted to the City’s contractors and said there was a valued monument on the property. Unfortunately, while the City and the contractors were clearing the land, they destroyed the stones that allegedly comprised the bridge abutments. The City acquiesced to the owner’s request that all work cease, and the property owners brought the subject lawsuit alleging various causes of action, including the destruction of archaeological resources in violation of §16-11-780 of the South Carolina Code.
This statute states that it is unlawful for a person to willfully, knowingly, or maliciously enter upon the lands of another and disturb or excavate a prehistoric or historic site for the purpose of discovering, uncovering, moving, removing or attempting to remove an archaeological resource.
The property owner’s expert testified that he believed the structures were historic abutments from the 1700s or early 1800s and likely to be the “Compty bridge abutment.” He explained that additional excavation and review of other properties across the river would have been the appropriate “next step”.
The property owners submitted an application in 2008 to the National Register of Historic Places, but the Department responded that a great deal more research and archeological investigation was needed before a determination of eligibility could be made.
The record contains a screenshot from the website “ArchSite. The property owner’s expert testified that ArchSite is a multi-agency website that allows access to the archaeological resources database. He explained that when ArchSite receives information about historic sites, it verifies the information and posts it to the website. The image in the record shows a rendering of part of the Broad River and Castle Road, and it includes the notation “Historic Areas: Broad River Ferry and Bridge Site.”
The trial court found no governing preservation or conservation authority had recognized the structures as either archaeological resources or historical structures. In granting the City’s motion for summary judgment, the court found that the City was not liable under the statute.
The Court of Appeals agreed, holding that no evidence exists that the City cleared the land “for the purpose of” discovering, uncovering, moving, removing or attempting to remove an archaeological resource. Clearly, the City was attempting to clear the easement area to access the sewer lines. In addition, the owners provided no evidence that the City had any knowledge of the historic nature of the site.
The owner who shouted at the contractors could not testify that the contractors heard him and did not know whether this incident took place before or after the destruction of the stones. In addition, the Court held that the owners failed to show the City was obligated to consult ArchSite. The Court also questioned whether the entry on ArchSite contained sufficient information to conclude the property is historic because the entry indicates the site is “not eligible or requires evaluation.”
Finally, the Court held that regardless of whether any preservation or conservation authorities designed the structures as archaeological resources, the property owners failed to demonstrate the City had either actual or constructive knowledge of the existence of such resources.
*Brinkman v. Weston & Sampson Engineers, Inc., South Carolina Court of Appeals Opinion No. 5870, November 10, 2021
Lawyers: please take care of your mental and physical health!
This blog previously discussed three disciplinary cases from our July 7 Advance Sheet. Collectively, the facts from these three cases were downright depressing to lawyers who attempt to behave.
The first case* resulted in a disbarment of a lawyer who borrowed almost $100,000 from his trust account to make payroll and to cover other law firm operating expenses. The money was repaid within ten months!
The attorney attempted to correct this sorry state of affairs by reconciling his trust account, hiring a licensed CPA for all accounting and bookkeeping functions of his firm, giving the trust accounting responsibilities to another lawyer in the firm and completing Legal Ethics and Practice Program Ethics School, Trust Account School, and Advertising School. He was disbarred anyway. We have heard the moral of this story many, many times. The Supreme Court will not allow a lawyer to dip into the trust account, not even for a few months.
On November 10, however, this case was withdrawn, substituted and refiled. ** In the second opinion, the lawyer’s disbarment was withdrawn, and he was, instead, suspended for three years.
Following the July 7 opinion, the lawyer filed a petition for rehearing urging the Court to reconsider the sanction in light of mitigating evidence he provided to the ODC. The lawyer had submitted an affidavit in mitigation which revealed that, at the time of the misconduct, the lawyer was suffering from undiagnosed mental and physical health conditions.
Specifically, he was diagnosed with persistent depressive disorder, Attention-Deficit/Hyperactivity Disorder (ADHD), a motor tic disorder, an unspecified neurocognitive disorder secondary to a B12 deficiency, pernicious anemia, and hypothyroidism. One doctor’s report indicated it is likely that the lawyer’s neurocognitive impairment contributed to poor judgment and decision making. The lawyer now takes multiple medications, is undergoing clinical treatment, and testified that he is committed to continuing treatment for the rest of his life.
In a footnote, the Court pointed out that the ODC admits that it “inexplicably” failed to include the lawyer’s affidavit in mitigation with the other materials supplied to the Commission and the Court.
At the rehearing, the lawyer testified, credibly, according to the Court, that he is remorseful and regrets he did not recognize and treat his symptoms sooner, rather than withdrawing and isolating himself from the support of family, friends, and colleagues. He also testified that it was unfortunate that it took a catastrophe for him to get the help he needed. He said he believes he can make positive contributions to the legal profession if he is allowed to practice again.
The Court said that the mitigating circumstances do not, in any way, excuse the lawyer’s misconduct. But the Court was impressed that the lawyer adequately demonstrated his undiagnosed mental and physical conditions contributed to his conduct, and therefore considered these circumstances in imposing a sanction.
Lawyers, this case should be a lesson to all of us to take good care of our physical and mental health!
*In the Matter of Hopkins, South Carolina Supreme Court Opinion 28042 (July 7, 2021).
**In the Matter of Hopkins, South Carolina Supreme Court Opinion 28042 (November 10, 2021)
Court of Appeals holds lender’s foreclosure action is not a compulsory counterclaim
South Carolina’s Court of Appeals ruled on a noteworthy foreclosure case* in August.
The facts are interesting. In 1998, the borrowers signed a fixed-rate note in the amount of $60,400 at a 9.99% interest rate secured by a mortgage on property in Gaston. The note contained a balloon provision requiring payment in full on July 1, 2013.
On June 27, 2013, days before the note matured, the borrowers brought an action against the lender alleging a violation of South Carolina Code §37-10-102, the Attorney Preference Statute. The complaint alleged that no attorney supervised the closing, that the loan was unconscionable, and that the borrowers were entitled to damages, attorney’s fees and penalties as provided in the Consumer Protection Code. In addition, the complaint asserted a claim under the Unfair Trade Practices Act. All the allegations were premised on the same alleged violation of the Attorney Preference Statute.
The borrowers immediately defaulted on the note, and the lender filed an answer asserting no counterclaims. At trial, the jury found for the lender. About a year later, the borrowers sent a letter by certified mail to the lender requesting that it satisfy the mortgage. The letter included a $40 check to pay the recording fee for the mortgage satisfaction. The lender refused to satisfy the mortgage and returned the check.
The lender brought the present action for foreclosure in October of 2016. The borrowers asserted defenses of res judicata, laches, unclean hands, waiver, and setoff, but admitted no payments had been made on the loan after July 1, 2013. The borrowers then sought a declaratory judgment that the lender held no mortgage on the property, or, alternatively, that the mortgage was unenforceable. They alleged that the lender was liable for failing to satisfy the mortgage and for noncompliance with the Attorney Preference Statute. The lender denied the allegations and argued that the claims under the Attorney Preference Statute were time-barred.
Both parties sought partial summary judgments before the master-in-equity. The master granter the borrower’s motion and denied the lender’s motion. He ruled that the mortgage was satisfied and instructed the lender to file a satisfaction.
On appeal, the lender argued the master erred by finding its foreclosure action was a compulsory counterclaim in the 2013 action. The Court of Appeals agreed, holding that the two claims arose out of separate transactions. The Attorney Preference claim arose from the closing, while the foreclosure arose from the borrower’s default, according to the Court. The Court reversed the master’s award of partial summary judgment to the borrower and remanded the case for further proceedings. Because of its decision on this issue, the Court determined that it did not need to address the remaining issues.
*Deutsche Bank National Trust Company v. Estate of Houck, South Carolina Court of Appeals Opinion 5844, August 11, 2021.
Although politics are important to me, I see absolutely zero benefit in discussing politics on social media or in this blog. For that reason, I raise this topic with some apprehension and definitely without taking a political position. I raise it for educational purposes only.
I invite you to put this term in your favorite search engine: “terminating single-family zoning”. You will find articles that range in tone and opinion from, “The conservative case for ending single-family zoning” to “Dems are set to abolish the suburbs”. The arguments are all over the place!
My purpose in raising this topic is simply to ensure South Carolina real estate practitioners have it on their respective radars. Like most extreme changes, this one is likely to be very slow to make it to The Palmetto State, but it’s important for us to be prepared to address if and when it arrives at our borders.
One interesting perspective comes from Journal of the American Planning Association (Volume 86, 2020 – Issue 1) which argues that the privilege of single-family homes “exacerbates inequality and undermines efficiency” by making it harder for people to access high-opportunity places and contributing to shortages of housing in expensive regions. In many cities, the paper argues, single-family zoning prevents housing development where development would be most beneficial and instead pushes expansion into denser, lower income neighborhoods, onto polluted commercial corridors, and into the undeveloped land outside city boundaries. The authors have no illusion that making this change will be simple or that every city can handle the controversy the same way.
Arguments against eliminating single-family zoning include the idea that most Americans prefer detached single-family houses, that it creates more aesthetically pleasing neighborhoods, that it protects against excessive density, and that eliminating it will be impossible. Many arguments are made against constructing a housing tower next to existing detached homes. But counter arguments are made that removing single-family zoning might reduce rather than increase the prevalence of high-rise development because tall buildings are a response to scarcity of development-friendly parcels.
The conservate argument against single-family zoning is apparently that there is no greater distortion of the free market than local zoning codes, and that there are few bureaucracies doing more harm to property rights and freedom than local zoning officers.
See what I mean when I said the arguments are all over the place?
That being said, jurisdictions in California, Washington State, Oregon, Massachusetts, Minnesota, and Maryland are apparently considering loosening zoning restrictions. In one of his first actions after surviving an election seeking to oust him from office, California Governor Gavin Newsom essentially abolished single-family zoning throughout California and signaled his approval of legislation seeking to increase California’s housing production.
I doubt we will deal with this issue any time soon, but proactively becoming familiar with the arguments on all sides will only improve our ability to discuss the issues when the time comes.
The first Ethics Advisory Opinion of the year is noteworthy for South Carolina real estate practitioners.
Here is a brief summary of the facts: In a residential refinance, the lender’s loan estimate package provided the name of a specific South Carolina licensed attorney that the bank “identified” as one who could close the loan. The package expressly said the borrower could “shop for (the borrower’s) own providers” for legal and other services.
The borrower informed the bank that a different lawyer had been selected, but the bank’s second set of loan estimate documents again identified a different lawyer and again said the borrower could chose its own provider.
When the borrower asked why another lawyer’s name was identified, the bank responded that the borrower’s chosen lawyer could sign with a third-party company that the bank had contracted with to produce loan forms for an annual fee of $249 to be included on the list.
The borrower’s lawyer did not enroll in the program but did close the loan.
The question to the Ethics Advisory Committee was whether a lawyer may participate in a service provider network for an annual fee of $249 to be listed as an “identified” service provider without violating S.C. Rule of Professional Conduct 7.2(c)?
Rule 7.2 (c) generally provides that a lawyer shall not give anything of value to a person for recommending the lawyer’s services. One exception to the rule is that a lawyer may pay the reasonable costs of advertisements or communications permitted by the Rule.
The Committee pointed to Comment 7 which states that a communication contains a recommendation if it endorses or vouches for a lawyer’s credentials, abilities, competence, character, or other professional qualities. The bank’s form in this case only provides contact information for participating lawyers and indicates the lawyers on the list have been identified. And the borrower is told in each instance that he or she can choose a different lawyer.
The Committee said these limited statements hardly match up the verbs and nouns used to describe a “recommendation” in the comment because the language in the forms says nothing substantive about the credentials, abilities, competence, character, or professional quality of the listed lawyers.
The Opinion further stated that participation in the network appears to be open to any real estate attorney and that the fee appears to be reasonable considering the enrollment, onboarding, and maintenance charges for including attorneys in the network.
The short answer to the question was “yes”, a lawyer may pay the fee and participate in the network of legal service providers and be “identified” as a possible service provider.
It is interesting that the facts included this statement: “The package and disclosures are assumed to be compliant with federal and state requirements for loan applications and attorney-preference notices.” The Committee answered the very specific question put to it and clearly has no authority to address federal law.
Most South Carolina dirt lawyers were disappointed with the result of the 2017 Quicken Loan case which did not hold, as many had hoped, that a South Carolina licensed lawyer must be at the center of each residential real estate closing, overseeing each step, and ensuring that the consumer client’s interests are protected in each step. That case blessed a scenario where an out-of-state entity oversaw the closing process and divvied up the required lawyer functions among various functions.
A disciplinary case* from August of 2021 demonstrates just one way the scenario approved by Quicken can go awry.
The lawyer was hired by Superior Closing and Title Services, LLC to serve as closing attorney for a home purchase for an attorney’s fee of $200. That fee is our first clue about the type of closing that is the subject of this case. The Court refers to the purchaser as “C.W.” The lender was 1st Choice Mortgage, and the loan was assigned to Wells Fargo.
Almost two years after the closing, Wells Fargo demanded 1st Choice repurchase the loan because of a discrepancy with the title. The Court states “it was discovered” that C.W. was a straw purchaser who never made a payment on the loan. The lawyer argued, and the Office of Disciplinary Counsel did not dispute, that the lawyer was unaware of the straw purchase. The closing statement showed a payment by C.W. of $11,598.16. At the closing, a copy of a $12,000 cashier’s check made payable to Superior Closing was shown to the lawyer and to 1st Choice Mortgage as the source of the down payment.
The lawyer signed the normal certification at closing representing that the settlement statement was a true and accurate account of the transaction.
The $12,000 check was never negotiated, and 1st Choice never received the funds. 1st Choice paid over $39,000 to settle the claim with Wells Fargo.
1st Choice sued Superior Closing and the lawyer. The lawyer represented that Superior Closing prepared the closing statement and acknowledged that he failed to properly supervise the preparation of the settlement statement and the disbursement of funds. As a result of the lawsuit, a $39,739 judgment was filed against the lawyer and Superior Closing. The judgment has been satisfied.
We all know how challenging it is to supervise the disbursement of a residential closing where the funds do not flow through the closing attorney’s trust account. This disciplinary case demonstrates the danger of skipping that problematic but necessary step.
*In the Matter of Ebener, South Carolina Supreme Court Opinion No. 28047 (August 11, 2021)
The alleged successful purchaser seeks to void the sale!
I’ve always believed our courts will happily void any tax sale on the flimsiest of technicalities, but apparently not when the purported tax sale buyer is the party seeking to get out of the purchase.
Alterna Tax Asset Group, LLC v. York County* is a Court of Appeals case from July dealing with a 2014 tax sale. Alterna claims it was the successful bidder at the sale and sought to void the sale and cancel its ownership relying on §12-61-20 of the South Carolina Code, which reads, in part:
“Any…person…(that) has purchased at or acquired through a tax sale and obtained title to any real or personal property, may bring an action in the court of common pleas of such county for the purpose of barring all other claims thereto.”
The complaint alleged that the title to the property was clouded because of York County’s failure to provide proper notice. The complaint set up four causes of action: (1) declaratory judgment; (2) injunctive relief, (3) quiet title, and (4) unjust enrichment.
The Master consulted the County’s records and took judicial notice that Alterna was neither the purchaser of the property at the tax sale, nor the owner currently listed on the deed. The Master ruled Alterna was not a real party in interest and lacked standing. The Master also ruled that the quoted code section does not create a valid cause of action to void a tax sale.
Alterna appealed claiming the Master erred in taking judicial notice of the public records. The Court of Appeals termed this use of judicial notice “problematic” but decided the appeal on what it called a more fundamental issue: whether, as the alleged tax sale purchaser, Alterna may seek to rescind its successful purchase based on the facts in this case.
Since the purpose of the code section is to clear tax titles, the Court held that Alterna states to viable cause of action when it seeks to defeat rather than defend its title.
The Court accepted for the purposes of this appeal from a 12(b)(6) motion Alterna’s allegation that it purchased the property at the tax sale and concluded that no valid causes of action for declaratory judgment or injunctive relief existed.
The Court then stated that the remaining questions whether a winning bidder at a tax sale may use the quiet title doctrine or claim of unjust enrichment to defeat rather affirm the bidder’s title, are novel questions in South Carolina. The Court held that the complaint does not allege a proper cause of action for quiet title because there is no existing adverse claim. Neither the County nor anyone else was challenging Alterna’s tax title, so the claim is “imaginary or speculative”.
The unjust enrichment cause of action, which claimed the county was enriched by picketing the tax sale proceeds yet delivering a clouded title, collides, according to the Court, with South Carolina Code §12-51-160, which establishes as a matter of law the presumption that a tax deed is prima facie evidence of good title.
The Court further noted that Alterna’s alleged cloud on the title, that York County’s notification was defective, was a matter of public record visible to Alterna before the sale.
Finally, the Court held that Alterna’s claim was not a justiciable controversy. Alterna claimed its title was hopelessly clouded and would someday be snatched away by someone with a superior claim. The court resisted the request to “tame paper tigers or pass upon issues not subject to a genuine, concrete dispute.”
This is a very interesting case! I’ll keep you posed of future developments.
*South Carolina Court of Appeals Opinion 5836, July 14, 2021
This blog has discussed “Captain Sam’s Spit” in Kiawah Island three times before. Googling that picturesque name will reveal a treasure trove of news, opinion and case law involving the proposed development of a beautiful and extremely precarious tract of pristine beach property on South Carolina’s coast.
In the latest case*, South Carolina’s Supreme Court refers to the property as one of our state’s only three remaining pristine sandy beaches readily accessible to the general public. The other two are Hunting Island State Park and Huntington Beach State Park. I enjoy the blessing of walking the pristine beach of Huntington Beach State Park on a regular basis, so despite having a career on the periphery of real estate development, I am in favor of maintaining these three state treasures.
The South Carolina Bar’s Real Estate Intensive seminar in 2016 and 2018 included field trips to Captain Sam’s Spit, from a distance at least. Professor Josh Eagle of the University of South Carolina School of Law was an excellent tour guide, and how many opportunities do we, as dirt lawyers, have for field trips? The South Carolina Environmental Law Project, located in Pawleys Island, fights these cases. Amy Armstrong, an attorney with that entity, joined our group to explain the environmental and legal issues.
Here are greatly simplified facts. Captain Sam’s Spit encompasses approximately 170 acres of land above the mean high-water mark along the southwestern tip of Kiawah Island and is surrounded by water on three sides. The Spit is over a mile long and 1,600 feet at its widest point, but the focal point of the latest appeal is the land along the narrowest point (the “neck”), which is the isthmus of land connecting it to the remainder of Kiawah Island. The neck occurs at a deep bend in the Kiawah River where it changes direction before eventually emptying into the Atlantic Ocean via Captain Sam’s Inlet.
The neck has been migrating eastward because of the erosive forces of the Kiawah River. The “access corridor”—the buildable land between the critical area and the ocean-side setback line—has narrowed significantly in the past decade to less than thirty feet. Googling this issue will lead to active maps which show the change over time. The width of the neck is significant because the developer needs enough space to build a road. At the base of the neck is Beachwalker Park, operated by the Charleston County Parks and Recreation Commission. Our fieldtrips were conducted on that Park.
Previously, the administrative law court (ALC), over the initial objection of DHEC, has granted permits for the construction of an extremely large erosion control device in the critical area. In the prior cases (citations omitted), the Supreme Court found the ALC erred. The current appeal stems from the ALC’s third approval of another structure termed “gargantuan” by the Supreme Court—a 2,380-foot steel sheet pile wall designed to combat the erosive forces carving into the sandy river shoreline in order to allow the developer to construct the road to support the development of fifty houses. The Court again reversed and, in effect, shut down the proposed development, at least temporarily. The economic interests of an increased tax base and employment opportunities do not justify eliminating the public’s use of protected tidelands, according to the Court.
After a motion for a re-hearing, the result is the same. The Court reaffirmed its earlier decision without further arguments. We’ve pondered whether each case is the end of the litigation. At this point, we don’t know. Creative developers and lawyers may make further attempts to proceed. Stay tuned.
*South Carolina Coastal Conservative League v. South Carolina Department of Health andEnvironmental Control, South Carolina Supreme Court Opinion 28031 (June 2, 2021); Re-Filed September 1, 2021.
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