THE STATE OF SOUTH CAROLINA In The Court of Appeals

First Citizens Bank and Trust Company, Inc., Respondent,

v.

Ronald D. Taylor and Te d D. Smith, Defendants,

Ex Parte: Smith Family, LL C, WHS Properties, LLC,
and Wanda H. Sm ith, Appellants.

Appellate Case No. 2017-001700

Appeal From Greenville County Charles B. Simmons, Jr., Circuit Court Judge

Opinion No. 5739 Submitted February 18, 2020 – Filed July 8, 2020

AFFIRMED

Randall Scott Hiller, of Gr eenville, for Appellants.

Joey Randell Floyd and Chelsea Jaqueline Clark, both of Bruner Powell Wall & Mullins, LLC, of Columbia, for Respondent.THOMAS, J.: Smith Family, LLC, WHS Propert ies, LLC, and Wanda H. Smith (Appellants) appeal a mast er-in-equity's order base d on First Citizens Bank and Trust Company, Inc.'s initiation of supplemental proceedings to collect on an order of judgment, arguing the master erred in (1) adjudicating a Statute of Elizabeth (SOE) claim as part of supplementary pr oceedings; (2) adjudicating facts without the opportunity for Appellants to present evidence; (3) not ruling on whether the subject property was exempt; (4) granting a motion to join Appellants; and (5) finding subject matter jurisdiction to add parties. We affirm.

FACTS

On May 22, 2008, Ronald Taylor and Ted Smith 1 executed a note in favor of First Citizens in exchange for a $ 52,526.07 loan. Taylor and Smith failed to make the required payments, and on July 28, 2014, First Citizens filed an action against them. By order filed Oct ober 1, 2015, the circuit court entered a judgment of $ 74,843.23 against Taylor and Smith. Taylor and Smith appealed to this court,
which affirmed. First Citizens Bank & Trust Co. v. Taylor , Op. No. 2016-UP-471 (S.C. Ct. App. filed Nov. 9, 2016).

After an execution was issued on October 27, 2015, and a nulla bona return was made to the execution, the matter was re ferred to the master, and First Citizens filed a petition for supplemental proceed ings. The master held a hearing on January 23, 2017.

Smith testified he "lived off of" his social security income and had no other sources
of income or bank accounts. Smith ad mitted his wife owned an LLC, Smith Family, LLC, that had one bank acc ount at United Community Bank (UCB). Taylor similarly testified he had no bank accounts and "lived off of" his social security income. First Citizens moved for additional discovery, which the master granted.

First Citizens issued subpoenas and mo tions to compel, seeking documents regarding Smith Family, LLC. Smith, on behalf of himself and Appellants, moved to quash as to the UCB account belonging to Smith Family, LLC. After a hearing and based on documents provi ded by UCB, the master de nied the motion to quash by order filed May 22, 2017. On May 24, 2017, Smith and Mrs. Smith were deposed.

1 Ted Smith is married to Wanda H. Smith, one of the appellants.In his deposition, Smith testified he had an accounting degree and an MBA, was 69 years old, and had worked in banking and the building business until 2008. He asserted he set up between fifteen and twenty LLCs during his business career, and he had three primary companies at the time he quit in 2008.

Smith admitted he used the UC B account for personal use, su ch as to pay bills. He also admitted he was a signatory on the acc ount. At the time of his deposition, the
UCB account had a bala nce of $380,000.

Smith testified he was a realtor and a broker-in-charge of two real estate companies. He admitted he transferred his personal funds into the Smith Family, LLC, including the following four deposit s of his money into the UCB account:

1) March 23, 2016: Inhe ritance of $15,789.27. 2 2) July 14, 2016: Real esta te commission for $16,800. 3) August 17, 2016: Real estate commission for $20,250. 4) October 27, 2016: Compensation for managing a project known as the "Easley Building" of $ 28,187.49

.

These deposits totaled $ 81,026.76

.

Smith also admitted Mrs. Sm ith purchased silver from the account in February 21, 2016, for $135,374. The Smiths also purchased gold using money from the account. Smith estimated they owned a pproximately $300,000 in gold and silver at the time of the depositions. Smith acknowledged his money was "mixed in with" the Smith Family, LLC money.

Mrs. Smith testified in her deposition that she majored in Art in college, worked for a few years in administrative/retail jobs, worked for fifteen years for her father's construction comp any, and then became a st ay-at-home mother to the
Smiths' two children. She testified that throughout the forty-two years of their marriage, she never worked for any of her husband's businesses. According to Mrs. Smith, she and Smith are now retired, although Smith looks for real estate deals. Smith always handled the family finances, and Mrs. Smith was only aware
of one BB&T bank account.

2 $15,664.27 distribution from his mother 's estate plus $125 payment from the personal representative.As to Smith Family, LLC, Mrs. Smith te stified her husband managed it; she did not know where it banked; she did not know what assets it held; she was unaware of whether there were corporat e records and that the LLC had been subpoenaed; and she knew nothing about the purchase of gold and/or silver. She further testified
Smith had full and exclusive control of all bank accounts of the LLC. Smith acknowledged she was the sole owner of th e LLC and Smith was the sole manager; however, she insisted the money in the LL C was solely hers although she did not know where it came from. During cross-ex amination, she testified the money came from earnings she saved while work ing "since [she] was a teenager."

Mrs. Smith testified WHS Pr operties, LLC (WHS), one of the appellants in this case, was her company, but she admitted Smith organized it in 2008. Mrs. Smith testified WHS owned a shopping center that had been sold; the proceeds were transferred to Smith Family, LLC; a nd WHS was now "close d." She admitted Smith suffered financial hardships dur ing the recession in 2008 and 2009.

Following the depositions, First Citizens move d to join Appellants as parties. First
Citizens also moved to execu te on funds held by Appellant s. The master entered a consent order prohibiting Smith Family , LLC from selling, disposing of, or otherwise transferring the gold and silver.

A hearing on the motions to join the par ties and execute on the funds was held on June 23, 2017. First Citizens argued Rhi no Realty 1, Fund 1, LLC, changed its name to WHS Properties, LLC, in 2008 when Smith closed most of his businesses. First Citizens argued the judgment wa s obtained in 2015; the funds were
transferred into the Smith Family, LLC account in 2016; and the purchases of gold
and silver were made in 2016. At the ti me of the hearing, Smith Family, LLC was actively engaged in a project with a chur ch, which obligated Smith Family, LLC to build a building. According to First Citi zens, Smith was not retired; rather, he was actively involved in developi ng property. Furthermore, First Citizens argued, the SOE applied because property was transferred to a third-party, the Smith Family, LLC, to avoid the judgment . The master granted the motion to add the parties during the hearing and took the ot her issues under advisement.

By written order filed July 5, 2017, th e master granted the motion to add the parties. The master found Smith's de posits totaling $ 81,026.76 of his personal funds into the Smith Family, LLC, bank account constituted "transfers without
valuable consideration" or in the altern ative, fraudulent transfers made with the actual intent of defrauding creditors. T hus, the master ordere d Appellants to pay First Citizens $ 81,026.76 toward its judgment against Smith. Th e master declinedto seize or proceed against other a ssets owned by Appellants, "based upon substantive due process rights of these par ties . . . [, finding] such relief is more appropriately sought through [First C itizens] bringing an independent action against them."

Appellants moved to reconsid er, and First Citizens moved to compel payment. By order filed August 7, 2017, the master denied the motion to reconsider and held the motion to compel in abeyan ce, stating "[i]n the event that Smith Family, LLC has not paid the money . . . this Court will sc hedule and hear [the motion to compel] as soon thereafter as reasonably possible." Appellants filed a motion for supersedeas with the master and filed a notice of appe al with this court. By order filed September 6, 2017, the master required Appellants to tr ansfer $125,000 in gold to First Citizens, after its verification, to be held in a safety deposit box until Appellants paid the $ 81,026.76 by Decembe r 31, 2017. The master retained jurisdiction over the motion for supersedeas. First Citizens moved to hold Appellants in contempt when they faile d to comply with the September 6, 2017 order by allegedly tendering only $ 91,438. 76 worth of gold. By order filed October 20, 2017, the master ordered Smith to liquidate the gold within fifteen days and pay First Citizens by check to be held by the clerk of court. The master held in abeyance First Citizen's re quest for fees for authentication and transportation of the gold. According to Fi rst Citizens, the funds are being held by the court during the pendency of the appeal.

STANDARD OF REVIEW

"A clear and convincing evidentiary standard governs fra udulent conveyance claims brought under the St atute of Elizabeth." Oskin v. Johnson , 400 S.C. 390, 396, 735 S.E.2d 459, 463 (2012). "An action to set as ide a conveyance under the Statute of Elizabeth is an equitable ac tion, and a de novo standard of review applies." Id. at 397, 735 S.E.2d at 463. "On app eal from an action in equity, [the appellate court] may find facts in accordan ce with its view of the preponderance of
the evidence." Walker v. Brooks , 414 S.C. 343, 347, 778 S.E.2d 477, 479 (2015). "However, this broad scope of review does not require this court to disregard the findings at trial or ignore the fact that th e [master] was in a better position to assess the credibility of the witnesses." Laughon v. O'Braitis , 360 S.C. 520, 524-25, 602 S.E.2d 108, 110 (Ct. App. 2004).

"The interpretation of a stat ute is a question of law." Sparks v. Palmetto Hardwood, Inc. , 406 S.C. 124, 128, 750 S.E. 2d 61, 63 (2013) (citing CFRE, L.L.C.

v. Greenville Cty. Assessor , 395 S.C. 67, 74, 716 S.E. 2d 877, 881 (2011)). "ThisCourt may interpret statutes, and therefore resolve this case, 'without any deference
to the court below.'" Brock v. Town of Mount Pleasant , 415 S.C. 625, 628, 785 S.E.2d 198, 200 (2016) (quoting CFRE , 395 S.C. at 74, 716 S.E.2d at 881).

LAW/ANALYSIS

1. Supplementary Proceedings 3

Appellants argue the master erred in adjudicating the SOE claim as part of a supplementary proceeding and making factual findings without the opportunity for Appellants to present evidence, which Appe llants argue violated their rights to due process. Appellants maintain the master erred by adding them as parties to a supplementary proceeding, arguing First C itizens was required to file a separate action, including pleading the SOE, conducting discovery , and affording Appellants a trial.

There is clear authority to r each assets of a judgment debtor in the hands of a third party; however, the issue in this case is whether the supplementary proceedings met the statutory requireme nts governing the procedure to reach the assets, and whether this supplementary proceeding provi ded due process to Appellants. "If a judgment is unsatisfied, the judgment creditor may institute supplementary proceedings to discover assets." Johnson v. Serv. Mgmt., Inc. , 319 S.C. 165, 167, 459 S.E.2d 900, 902 (C t. App. 1995), aff'd , 324 S.C. 198, 478 S.E.2d 63 (1996). "Supplementary proceedings are equitable in nature." Ag-Chem Equip. Co. v. Daggerhart , 281 S.C. 380, 383, 315 S.E.2d 379, 381 (Ct. App. 1984). "Proceedings supplementary to execution . . . provid[e] for examination of the judgment debtor for the purpose of discove ring property out of which the judgment against him may be satisfied . . . ." Lynn v. Int'l Bhd. of Firemen & Oilers , 228
S.C. 357, 362, 90 S.E. 2d 204, 206 (1955).

South Carolina Code Section 15-39-410 provides the court "may order any property of the judgment debt or, not exempt from execution, in the hands either of himself or any other person or due to the judgment debtor , to be applied toward the satisfaction of the judgment . . . ." S.C. Code Ann. § 15-39-4 10 (2005) (emphasis added). Our code also provides a judgme nt creditor with the ability to "arrest" funds in the hands of a third party if alleged by a creditor to belong to the judgment
debtor and to hold the funds until the true ownership is decided. S.C. Code Ann. §§ 15-39-310 to -320 (2005); see Deer Island Lumber Co. v. Virginia-Carolina

3 Like Appellants did in their brief, we combine the first two arguments.Chem. Co. , 111 S.C. 299, 303, 97 S.E. 833, 834 (1 919) (describing the ability to arrest funds). Section 27-23-10( A), the SOE, provides as follows:

Every gift, grant, alienation, bargain, transfer, and conveyance of lands, tenement s, or hereditaments, goods and chattels or any of them , or of any lease, rent, commons, or other profit or charge out of the same, by writing or otherwise, and ev ery bond, suit, judgment, and execution which may be had or made to or for any intent or purpose to delay, hinder, or defraud creditors and others of their just and lawful actions, suits, debts, accounts, damages, penalties, and forfeitures must be
deemed and taken . . . to be clearly and utterly void . . . .

S.C. Code Ann. § 27-23- 10(A) (2007). Finally, however, Section 15-39-460 provides:

If it appears that a person or corporation alleged to have property of the judgment debtor or indebted to him claims an interest in the property adverse to him or
denies the debt such interest or debt shall be recoverable only in an action against such person or corporation by
the receiver.

S.C. Code Ann. § 15-39-4 60 (2005) (emphasis added).

Appellants cite Wannamaker v. Bryant , 165 S.C. 107, 110, 162 S.E. 779, 780 (1932) (quoting Palmetto Bank & Trust Co . v. McCown-Clark Co. , 143 S.C. 98, 103, 141 S.E. 155, 156 (1928)), in which our supreme court held the court had no authority to "summarily dispose of the i ssue of ownership, or to order property claimed by another to be applied towards the satisfaction of an execution against the judgment debtor." First Citizens argues Wannamaker is distinguishable.

In Wannamaker , a wife transferred real estate to her husband to avoid a creditor.
Id. at 108, 162 S.E. at 779. The creditor filed an action against the husband and the wife to set aside the deed, a lleging a fraudulent conveyance. Id. Thereafter, the creditor filed "proceedings supplementary to the execution." Id. The husband was not made a party to the supplementary proceedings. Id. At the hearing in the supplementary proceedings, the trial cour t found the transfer had been made "to keep the bank from getting the property." Id . The trial court ordered the propertywas subject to the satisfaction of the creditor's judgment. Id. at 108

− 09, 162 S.E.
at 779

− 80. On appeal, our supreme court reversed, recognizing the husband had not been made a party to the supplemental proceedings. Id. at 110, 162 S.E. at
781. The court noted its judgment was "without prejudice to the right of the [creditor] to proceed with his acti on to set aside the deed . . . ." Id. at 111, 162 S.E.

at 781.

Appellants also rely on Palmetto Bank & Trust Co . v. McCown-Clark Co. , 143
S.C. 98, 141 S.E. 155 (1928). In Palmetto Bank , the corporate judgment debtor was named as the beneficiary on a life insurance policy of one of its individual

owners. Id. at 100, 141 S.E. at 155. The cor poration denied ownership of the funds, stating the individual owner had paid the premiums on the policy, and maintained the proceeds bel onged to the owner's wife. Id. After supplementary proceedings, the circuit court granted judgment in the creditor's favor. Id. at 101, 141 S.E. at 155. Our supreme court reversed, finding as follows:

It appears manifestly inte nded by the [statutes] that a third person claiming property rights which have not been passed upon in the original action under which the execution is issued should not be deprived either of his day in court or of the right of trial in the form prescribed by law for a regular judicial procedure. No provision appears that either expressly or by implication gives authority to the court to summa rily dispose of the issue of ownership, or to order prope rty claimed by another to be applied towards the satisfaction of an execution against the judgment debtor. Nor ca n an appearance and return to such a rule, when made in obedience to the order of the court, be given effect as consent to a mode of trial not authorized by the provisions of the statutes. On the other hand, it must also be recognized that no limitation is imposed upon the discretion of the circuit judge in keeping the property within the control of the court, by forbidding its transfer or other disposition.

Id. at 103, 141 S.E. at 156 (emphasis added). The court in Palmetto Bank relied on
Deer Island , quoting: "It is true the issue of ownership may not be finally determined, except the Deer Island Lumber Company shall be heard." Id. (quoting
Deer Island , 111 S.C. at 302, 97 S.E. at 834). However, in Deer Island , the third party (Deer Island Lumber) cl aiming ownership over the f unds alleged to belong tothe judgment debtor moved to interven e in the supplementary proceedings. Deer
Island , 111 S.C. at 302, 97 S.E. at 833

. The judgment debtor appealed a temporary injunction restricting a bank from releasing the funds. Id. The circuit court appointed a receiver and grante d the motion to intervene. Id. On appeal, our supreme court affirmed. Id. at 305, 97 S.E. at 834.

First Citizens distinguishes Palmetto Bank , arguing Appellants did not claim ownership of the deposits made by Smith, the judgment debtor. Instead, Smith's uncontradicted deposition testimony stated the funds at issue were his own. Furthermore, in Wannamaker , the husband was not made a party to the supplementary proceedings. Wannamaker , 165 S.C. at 108, 162 S.E. at 779. In this case, Appellants were joined and ha d the opportunity to participate in the proceedings. The court in Palmetto Bank prohibited a summary disposition of the issue of ownership, which is not the case here. See Palmetto Bank , 143 S.C. at 103, 141 S.E. at 156. Finally, in Deer Island , the court permitted a motion to intervene, implying a continuation of the supplementary proceedings, rather than a separate action, could be used to determine ownership of the funds as long as the third party alleging ownership had the opportunity to be heard. Deer Island , 111 S.C. at 302, 97 S.E. at 833.

In this case, Appellants had the opportunity to dispute the funds belonged to Smith, and Smith's own testimony was that the f unds at issue were his funds deposited into Smith Family, LLC's account. Appe llants were on notice and participated throughout the proceedings, during discovery, depositions, hearings, and judicial review. Appellants could have presented rebuttal evidence and had every opportunity to be heard. See Kurschner v. City of Camden Planning Comm'n , 376
S.C. 165, 171, 656 S.E.2d 346, 350 (2008) ("The fundament al requirements of due process include notice, an opportunity to be heard in a meaningful way, and judicial review."). As the master found in his order denying A ppellants' motion for reconsideration,

In terms of Smith Family, LLC's ability to present evidence and testimony, this Court notes that depositions were taken in conjuncti on with the Supplemental Proceedings, and Counsel for Smith Family, LLC participated in the depositi ons. Moreover, [Appellants' counsel] presented this Court with his arguments and had the opportunity to present evidence at the Motions hearing on June 23, 2017, if Smith Family, LLC wanted to present evidence. However, in light of the prior sworntestimony at the January 23, 2017 Supplemental Proceedings hearing, the admissions by Ted D. Smith in his deposition, along with the deposition testimony of Wanda H. Smith, it is difficult to imagine what, if any, evidence or testimony that Smith Family, LLC and/or Ted D. Smith could have presen ted to dissuade this Court from finding the deposit of Ted D. Smith's personal funds
into the bank account of Sm ith Family, LLC as being
fraudulent transfers.

We affirm, finding the master did not err in applying either the SOE or section 15

- 39-410 in a supplementary proceeding a nd there was no due process violation. 4

2. Exemption

Appellants argue the master e rred in finding the funds were transferred in violation of the SOE without determining if they were exempt from execution under section 15-39-410. Appellants maintain the ma ster only has authority over non-exempt property and section 15-41-30 provides a minimum exemption of $10,000, which was not considered by the master.

Appellants did not raise this issue to the ma ster at the hearing, the master did not rule on it, and Appellants raised it fo r the first time in their motion for reconsideration. Thus, it is not preserved for appellate review. See Stevens & Wilkinson of S.C., Inc. v. City of Columbia , 409 S.C. 563, 567, 762 S.E.2d 693, 695 (2014) ("[A] party cannot use a Rule 59(e)[, SCRCP] motion to advance an issue the party could have raised to the [trial] court prior to judgment, but did not."); Patterson v. Reid , 318 S.C. 183, 185, 456 S.E.2d 436, 437 (Ct. App. 1995) ("A party cannot for the first time raise an issue by way of a Rule 59(e) motion
which could have been ra ised at trial.").

3. Subject Matter Jurisdiction and Joinder of Appellants

4 Without citation to authority, Appellants summarily address the master's findings that the transfers were fraudulent conveyances . We decline to address this issue.

See Broom v. Jennifer J. , 403 S.C. 96, 115, 742 S.E.2d 382, 391 (2013) ("Issues raised in a brief but not supported by au thority may be deemed abandoned and not considered on appeal.").Appellants argue the master lacked subject matter jurisdiction to add parties to an order for discovery of property supplemen tal to execution of judgment; thus, the master erred in granting the moti on for joinder. We disagree.

"Whether a court has subject matter jurisdiction is a ques tion of law we review de

novo." Deborah Dereede Living Tr. dated Dec. 18, 2013 v. Karp , 427 S.C. 336, 346, 831 S.E.2d 435, 441 (Ct. App. 2019). "[ S]ubject matter jurisdiction refers to
a court's constitutional or statut ory power to adjudicate a case." Johnson v. S.C. Dep't of Prob., Parole, & Pardon Servs. , 372 S.C. 279, 284, 641 S.E.2d 895, 897 (2007). "Stated somewhat differently, 'subj ect matter jurisdiction is the power of a
court to hear and determine cases of the general class to which the proceedings in question belong.'" Id. (quoting State v. Gentry , 363 S.C. 93, 100, 610 S.E.2d 494, 498 (2005)). "It is well-settled that issues relating to subject matter jurisdiction may[ ]be raised at any time." Bardoon Props., NV v. Eidolon Corp. , 326 S.C. 166, 168, 485 S.E.2d 371, 372 (1997).

A master's authority to determine issues referred to him by the circuit court is a question of subject matter jurisdiction, whic h "may be raised at any time, including on appeal." Normandy Corp. v. S.C. Dep't of Transp. , 386 S.C. 393, 403, 688 S.E.2d 136, 141 (Ct. App. 2009). "Pursuant to Rule 53, SCRCP, a master has no power or authority except that which is gi ven to him by the order of reference." Bunkum v. Manor Props. , 321 S.C. 95, 98, 467 S.E.2d 758, 760 (Ct. App. 1996).
"When a case is referred to a master, Rule 53(c)[, SC RCP] gives the master the power to conduct hearings in the same manne r as the circuit court, unless the order of reference specifies or limits his powers." Smith Cos. of Greenville, Inc. v. Hayes , 311 S.C. 358, 360, 428 S.E.2d 900, 902 (C t. App. 1993). Rule 69, SCRCP provides that "proceedings supplementary to and in aid of a judgment . . . shall be as provided by law[,]" and authorizes a ju dgment creditor to "examine any person . . . in the manner provided . . . for obtaining discovery."

In this case, the circuit court's order of reference ordered Ta ylor and Smith to appear before the master "TO SHOW CA USE why [their] property should not be applied towards satisfaction of the Judgme nt" and referred the case to the master with the authority to "entertain and rule upon all motions necessary to dispose of this matter, to include but not limited to , motions to dismiss, motions to appoint Receiver, motions to continue the matter, and motions to sell all or certain property of judgment debtor in satisfaction of [First Citizen's] debt and has authority to enter
a Final Order."We find the master acted within his subject matter jurisdiction in joining Appellants in the supplementary proceedi ngs, in applying the SOE and section 15

- 39-410 in determining the ownership of th e funds, and in ordering the sale of the gold and silver to satisfy the judgment. The type of procedure used, whether a supplementary proceeding or a new action, does not affect the master's power to hear this type of case. See Gentry , 363 S.C. at 100, 610 S.E.2d at 498 (noting "subject matter jurisdiction is the power of a court to hear and determine cases of the general class to which the pr oceedings in question belong").

CONCLUSION

Based on the foregoing, the master's order is

AFFIRMED.

HUFF and MCDONALD, JJ., concur.