Court Opinion

ID: 2821367
Source: CourtListenerOpinion
Date Created: 2015-07-29 14:27:23.577278+00
Date Added: 2024-06-11T13:05:19.195934
License: Public Domain

THE STATE OF SOUTH CAROLINA 

               In The Supreme Court 

   Amber Johnson, Petitioner,

   v.

   Stanley E. Alexander, Mario S. Inglese and Mario S.
   Inglese, PC, of whom Stanley E. Alexander is the
   Respondent.

   v.

   Mario S. Inglese and Mario S. Inglese, PC, Third Party
   Plaintiffs,

   v. 

   Charles Feeley, Third Party Defendant. 

   Appellate Case No. 2014-001167 

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

              Appeal from Charleston County 

    The Honorable J. C. Nicholson, Jr., Circuit Court Judge 

                     Opinion No. 27553 

           Heard June 2, 2015 – Filed July 29, 2015 

              REVERSED AND REMANDED
            Mary Leigh Arnold, of Mary Leigh Arnold, PA, of Mt.
            Pleasant; Justin S. Kahn and Wes B. Allison, both of
            Kahn Law Firm, LLP, of Charleston, for Petitioner.

            Joel W. Collins, Jr., of Collins & Lacy, PC, of Columbia,
            and Robert F. Goings, of Goings Law Firm, LLC, of
            Columbia, for Respondent.

       JUSTICE HEARN: In this attorney malpractice case, Amber Johnson
alleges her closing attorney, Stanley Alexander, breached his duty of care by
failing to discover the house Johnson purchased had been sold at a tax sale the
previous year. The trial court granted partial summary judgment in favor of
Johnson as to Alexander's liability. On appeal, the court of appeals held Alexander
could not be held liable as a matter of law simply because the attorney he hired to
perform the title work may have been negligent. Instead, the court determined the
relevant inquiry was "whether Alexander acted with reasonable care in relying on
[another attorney's] title search"; accordingly, it reversed and remanded. Johnson
v. Alexander, 408 S.C. 58, 64, 757 S.E.2d 553, 556 (Ct. App. 2014). We disagree
and find the trial court properly granted summary judgment as to liability. We
therefore remand to the trial court for a hearing on damages.

                    FACTUAL/PROCEDURAL BACKGROUND
      Alexander acted as Johnson's closing attorney when she purchased a home
in North Charleston on September 14, 2006. The title examination for the home
had been performed by attorney Charles Feeley at the request of Johnson's
previous attorney, Mario Inglese. Alexander purchased the title work from Inglese
and relied on this title exam in concluding there were no back taxes owed on the
property. Thereafter, Johnson learned the house had been sold at a tax sale and she
did not have title to the property. In fact, the property had been sold October 3,
2005, almost a year prior to Johnson's purchase. Because of the title issue, the
mortgage payments on the home ceased and the property eventually went to
foreclosure.

       Johnson brought this cause of action for malpractice, breach of fiduciary
duty, and breach of contract against Alexander and Inglese. Specifically, Johnson
alleged the attorneys owed her a duty to perform a complete title exam on the
property to ensure she received good and clear title.
      Johnson moved for partial summary judgment as to Alexander's liability.
At the hearing, Johnson submitted the affidavit of Mary Scarborough, the
Delinquent Tax Collector for Charleston County. She attested that she "had direct
and personal knowledge that information regarding delinquent taxes for real
properties located in Charleston County, South Carolina, was readily and publicly
available in July, August and September of 2006" in the Office of the Register
Mesné Conveyance for Charleston County via a mainframe database.
Furthermore, she stated that the Delinquent Tax data for Charleston County real
properties has been publicly available on a mainframe database since 1997, when
she helped design the system currently in use.

       Alexander presented an affidavit from Feeley stating that although he could
not remember the specific details of this title exam, he conducted all his
examinations the same. Feeley further detailed his process at length, explaining
his reliance on the Charleston County Online Tax Systems and his practice of
searching back ten years of tax payments. He indicated his notes showed he found
no back taxes due or owing. Feeley also attested that a prior tax sale would not
have been disclosed in the chain of title for this property or made publically
available in the RMC office at the time of the title examination and closing in 2006
because the tax sale deed was not recorded until December 12, 2006.

       The circuit court granted Johnson's motion as to Alexander's liability. The
court relied heavily on Alexander's pleadings and admissions in his deposition that
as a closing attorney he had a responsibility to ensure marketable title.
Additionally, the court found Alexander had proximately caused Johnson's
damages, but left the determination of the amount for a later hearing.

      On appeal, the court of appeals reversed and remanded, holding the circuit
court incorrectly focused "its inquiry on whether an attorney conducting a title
search on this property should have discovered the delinquent taxes from 2003 and
2004 and the tax sale from 2005." Johnson, 408 S.C. at 62, 757 S.E.2d at 555.
Instead, the court of appeals held the proper question was "whether Alexander
acted reasonably under the existing circumstances in relying on the title search
performed by Feeley." Id. at 63, 757 S.E.2d at 555. Finding there was a genuine
issue of material fact as to whether Alexander acted reasonably, the court of
appeals reversed the grant of summary judgment and remanded for trial. Id. at 64,
757 S.E.2d at 556. This Court granted certiorari to review the opinion of the court
of appeals.
                               ISSUE PRESENTED

     Did the court of appeals err in reversing the circuit court's grant of summary
judgment and remanding the case for trial?

                            STANDARD OF REVIEW

       When reviewing a grant of summary judgment, this Court applies the same
standard as the circuit court pursuant to Rule 56(c), SCRCP. Stevens & Wilkinson
of S.C., Inc. v. City of Columbia, 409 S.C. 568, 576, 762 S.E.2d 696, 700 (2014).
Summary judgment is appropriate where there is no genuine issue as to any
material fact and the moving party is entitled to a judgment as a matter of law.
Rule 56(c), SCRCP. In determining whether any triable issues of fact exist, the
Court views the evidence and all reasonable inferences that may be drawn in the
light most favorable to the non-moving party. Evening Post Pub. Co. v. Berkeley
Cnty. Sch. Dist., 392 S.C. 76, 81–82, 708 S.E.2d 745, 748 (2011). To withstand a
summary judgment motion 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. Turner v. Milliman, 392 S.C. 116, 122, 708 S.E.2d 766, 769 (2011).

                                 LAW/ANALYSIS

       Johnson argues the court of appeals erred in reversing the circuit court's
grant of summary judgment because it misapprehended the proper standard of care.
Specifically, Johnson argues the court of appeals erred in holding the requisite
inquiry is whether an attorney reasonably relied on another attorney's work where
that work is outsourced. Johnson contends that an attorney should be liable for
negligence arising from tasks he chose to delegate unless he has expressly limited
the scope of his representation. We agree.

       In a claim for legal malpractice, the plaintiff must prove: (1) the existence of
an attorney-client relationship; (2) a breach of duty by the attorney; (3) damage to
the client; and (4) proximate cause of the client's damages by the breach. Harris
Teeter, Inc. v. Moore & Van Allen, PLLC, 390 S.C. 275, 282, 701 S.E.2d 742, 745
(2010). An attorney is required to render services with the degree of skill, care,
knowledge, and judgment usually possessed and exercised by members of the
profession. Holy Loch Distribs., Inc. v. Hitchcock, 340 S.C. 20, 26, 531 S.E.2d
282, 285 (2000).
       In determining the scope of Alexander's duty, we accept his consistent
characterization of this responsibility—ensuring Johnson received good title. In
her complaint, Johnson alleged "[d]efendants had professional duties to ensure that
Plaintiff was receiving good and clear title to the subject property free of any
encumbrances, liens, or clouds on title before conducting the closing and if there
was a problem after the closing, to correct said deficiencies and/or advise Plaintiff
how to correct said deficiencies." In Alexander's answer he admitted those
allegations. Parties are generally bound by their pleadings and are precluded from
advancing arguments or submitting evidence contrary to those assertions. Elrod v.
All, 243 S.C. 425, 436, 134 S.E.2d 410, 416 (1964) ("[T]he general rule[ is] that
the parties to an action are judicially concluded and bound by such unless
withdrawn, altered or stricken by amendment or otherwise. The allegations,
statements or admissions contained in a pleading are conclusive as against the
pleader. It follows that a party cannot subsequently take a position contradictory
of, or inconsistent with, his pleadings and the facts which are admitted by the
pleadings are to be taken as true against the pleader for the purpose of the action.
Evidence contradicting such pleadings is inadmissible."). Additionally, during
Alexander's deposition, he plainly conceded he owed a duty to Johnson to have
clear title:

      Q. Alright. And you were hired, or you were her attorney for this
      closing? Right?

      A. Correct.

      Q. And you had responsibility to make sure that she got good and
      marketable title? Correct?

      A. Correct.

      Q. And that's one of the responsibilities of a lawyer handling the
      closing, representing the purchaser? Right?

      A. Correct.
lexander cannot now assert his duty was anything other than what he has
admitted—that he ensure good and clear title.

      However, even absent Alexander's admissions, we find the court of appeals
erroneously equated delegation of a task with delegation of liability. Certainly,
Feeley's negligence is the issue here, but that does not displace Alexander's
ultimate responsibility. While an attorney may delegate certain tasks to other
attorneys or staff, it does not follow that the attorney's professional decision to do
so can change his liability to his client absent that client's clear, counseled consent.
See Rule 1.8(h), RPC, RULE 407, SCACR ("A lawyer shall not. . . make an
agreement prospectively limiting the lawyer's liability to a client for malpractice
unless the client is independently represented in making the agreement."). Thus,
Alexander owed Johnson a duty and absent her agreement otherwise, he was liable
for that responsibility regardless of how he chose to have it carried out.1

       We therefore agree with Johnson that an attorney is liable for negligence in
tasks he delegates absent some express limitation of his representation. Stated
another way, without an express limitation in representation, attorneys cannot
delegate liability for tasks that are undertaken in carrying out the duty owed the
client. See 7A C.J.S. Attorney & Client § 289 ("Since an attorney has, in general,
no authority to employ another attorney to attend to the matters in which the first
attorney has been retained, it follows that, if the first attorney does entrust to
another the performance or prosecution of matters entrusted to him or her, the first
attorney becomes liable to the client for any negligence or wrongdoing on the part
of the other attorney."). A holding to the contrary would effectively allow an
attorney to independently limit the scope of his representation through the manner
in which he performs his duties instead of being bound by what the client
understands his responsibilities to be.

1
   Alexander separately alleges that because Johnson knew he did not personally
perform the title examination, its accuracy was not within the scope of his
representation of her. We find this contention unpersuasive. Pursuant to Rule
1.2(c), of the Rules of Professional Conduct, Rule 407, SCACR, "A lawyer may
limit the scope of the representation if the limitation is reasonable under the
circumstances and the client gives informed consent." In determining whether an
attorney obtained informed consent, comment 6 to Rule 1.0 of the Rules of
Professional Conduct, Rule 407, SCACR, clarifes that "A lawyer need not inform a
client or other person of facts or implications already known to the client or other
person; nevertheless, a lawyer who does not personally inform the client or other
person assumes the risk that the client or other person is inadequately informed and
the consent is invalid." Even assuming Johnson knew Alexander purchased the
title work from another attorney, this does not alleviate Alexander's responsibility
to ensure good title. It would only indicate she is aware he has delegated a task.
       Applying this standard to the facts, we find the grant of summary judgment
was proper because there is no genuine issue of material fact as to liability. The
circuit court relied on Scarborough's affidavit in concluding Johnson "proved to the
Court what the public records reflected at the time of closing—taxes for the
Property were delinquent for the tax years 2003 and 2004 and the Property had
been sold on October 5, 2005 at a tax sale." Although Alexander submitted an
affidavit by Feeley stating he would have discovered the information if it was
public, we agree with the circuit court's ultimate conclusion that there was no issue
of fact. Feeley admitted he did not remember the specifics of that transaction and
provided no documentation supporting his assertion that he performed a ten year
search and found no notice of the sale.

      Furthermore, we find the circuit court properly held there was no genuine
issue of material fact as to proximate cause. Because of Alexander's failure to
discover the tax sale, Johnson did not receive marketable title—or any title—to the
property she purchased. She was therefore unable to sell or rent the property.
Alexander's arguments that the property foreclosure was due to Johnson's own
negligence in failing to pay the mortgage will certainly be considered during the
hearing on damages; however, that allegation does not alter the fact that Johnson's
purchase of the property that had already been sold was a direct result of his failure
to ensure she received good title.

                                  CONCLUSION

      Based on the foregoing, we reverse the opinion of the court of appeals and
hold an attorney is liable for negligence in tasks he chooses to delegate absent an
express limitation of his representation. Finding Alexander breached his duty and
damages resulted, we reinstate the grant of partial summary judgment as to
Alexander's liability and remand for a determination of damages.

     TOAL, C.J., PLEICONES, KITTREDGE, JJ., and Acting Justice
James E. Moore, concur.