Court Opinion

ID: 8295123
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:01:19.597431+00
Date Added: 2024-06-11T16:44:00.953843
License: Public Domain

Justice KITTREDGE.
I concur in part and dissent in part. I respectfully dissent from this Court’s advisory opinion concerning the efficacy of the anti-assignment provision in the insurance policy. I otherwise concur in result only because of the stipulation that Appellant Alea London Limited’s rights remain fully preserved, notwithstanding the clearly erroneous order of the circuit court denying Rule 60(b), SCRCP, relief. As noted by the majority, “Narruhn conceded at oral argument that [Ap*347pellant] Insurer has retained all of its defenses and rights under the insurance contract.”
I 'write separately because I fundamentally disagree with the suggestion that Appellant lacked standing to challenge the order of the special referee assigning the insured’s rights under the policy. I find it breathtaking and a Due Process violation for a court to unilaterally and without notice affect and potentially impair a third party’s contract rights and then deny that third party the ability and standing to challenge the court order.6
The facts are not in dispute. Elisa Narruhn was injured in a shooting at The Red Room, a Myrtle Beach nightclub. The Red Room is owned by RKC Entertainment, LLC (RKC). Narruhn obtained a default judgment against RKC and sought to enforce the judgment through supplemental proceedings. The matter was referred to a special referee who, at the request of Narruhn, referred to the insurance policy as a “chose in action.” With the insurance policy characterized as a chose in action, the special referee believed he had the authority to assign RKC’s contract rights under the insurance policy to Narruhn. As stated, this was accomplished without notice to Appellant. This was error.
It is not necessary to decide the correctness of the chose in action designation. Even assuming the insurance policy was properly characterized as a chose in action by the special referee, it was improper to effect an assignment of the insurance policy without notice to Appellant. The law is clear — if an account or asset of a judgment debtor is held by a third party, that account or asset may be reached in supplemental *348proceedings only after notice and opportunity to be heard is given to the third party. See Johnson v. Serv. Mgmt., Inc., 319 S.C. 165, 167-69, 459 S.E.2d 900, 902-03 (Ct.App.1995) (holding that where funds are held by a third party that are allegedly owed a judgment debtor, “the funds on deposit could be reached only after supplementary proceedings were held to examine [the third party] with regard to the account”).
South Carolina Code section 15-39-350 provides:
After the issuing or return of an execution against property of the judgment debtor or of any one of several debtors in the same judgment and upon an affidavit that any person or corporation has property of such judgment debtor or is indebted to him in any amount exceeding ten dollars, the judge may by an order require such person or corporation, or any officer or member thereof, to appear at a specified time and place and answer concerning such property or indebtedness. The judge may also, in his discretion, require notice of such proceeding to be given to any party to the action in such manner as may seem to him proper.
(emphasis added). Here, no affidavit was presented to the special referee, and Appellant was given no notice and opportunity to appear.
Armed with the assignment, Narruhn filed the underlying action seeking actual and punitive damages for failure to pay or defend a claim. Appellant was served and then learned, for the first time, of the special referee’s assignment of RKC’s rights under the insurance policy to Narruhn. Appellant filed the Rule 60(b) motion understandably claiming “surprise.”7 I am confident the able circuit judge would have rectified the error of the special referee had he not mistakenly believed that his exercise of jurisdiction would run afoul of the rule prohibiting one circuit judge from overruling another.
This case may well illustrate the reasons why section 15-39-350, as well as basic notions of due process, require the providing of notice and opportunity to be heard to a third party before its rights may be affected. This is so because Appellant attempted to demonstrate in its Rule 60(b) motion *349to the circuit court the following: (1) the policy excluded coverage for “all causes of action arising out of an assault and/or battery”; (2) RKC failed to comply with the policy by failing to, among other things, notify Appellant of the Complaint, damages hearing and order of reference to the special referee; and (3) the policy included an anti-assignment provision, “[RKC’s] rights and duties under this policy may not be transferred without [Appellant’s] written consent except in the cause of death of an individual Named Insured.”
With great respect for the majority, I believe it ventures inappropriately into the merits of Appellant’s anti-assignment challenge. We are to believe that Appellant, which the majority assumes has no standing because its rights were not affected by the special referee’s order, may assert all of its defenses in the underlying action. Yet today, this Court sends an unmistakable message to the trial court that Appellant’s reliance on the policy’s anti-assignment provision is meritless. The Court speculates that “it appears the referee did not believe [Appellant’s] approval of the assignment of RKC’s rights was required.” I speculate that the referee had no clue that the policy had an anti-assignment provision, for it would not have served the mutual interests of Narruhn and RKC to inform the referee of the terms of the policy. After an extensive discussion indicating that an assignment after a loss has already occurred does not require an insurer’s consent, the majority correctly observes that the issue “is not properly before this Court.” Does one really expect the trial court to view this issue without regard to the Court’s advisory view of the anti-assignment provision? We are doing the same thing the special referee did — prematurely and adversely affecting Appellant’s rights. I dissent from the Court’s advisory opinion.
Perhaps in recognition of the erroneous rulings of the special referee and the circuit court, Narruhn made her concession at oral argument, acknowledging that Appellant retains all of its rights in the pending action. It is solely because of the stipulation fully preserving Appellant’s rights that I otherwise concur in result.

. I do not understand the majority's suggestion that the issue of Appellant's standing is not preserved, and I do not agree with the majority’s finding that "the issue of standing was not appealed." The entire essence of its Rule 60(b), SCRCP, motion was that the special referee’s order affected its rights. As asserted in its supporting memorandum, Appellant argued that "Alea London, whose interests were to be affected, should have been provided Notice of Hearing before the Special Referee.” In Appellant's final brief to this Court, Appellant referenced the circuit court’s order "that [Appellant] may not file a Rule 60 motion because it was not a party[,]” and stated that the "Trial Court’s Order errs in construing South Carolina law." A fair reading of this record reeks of Appellant’s contention that it has standing to pursue Rule 60(b) relief.

. As Appellant observed in its Rule 60(b) motion, "[t]here was nothing regarding the [special referee’s order] which was not a surprise.” (emphasis in original).