Court Opinion

ID: 9570240
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:21:25.101219+00
Date Added: 2024-06-11T12:05:11.736495
License: Public Domain

Toal, Justice,
dissenting:
I respectfully dissent.
FACTS
Village Pond was developed by Innovative Developers, Inc. (“Innovative”). J. Allen Shumaker Builders, Inc. (“Shumaker”), Thomas Bagnal (“Bagnal”), and Duncan M. Lang (“Lang”) each owned one-third of the corporation. Lang subsequently sold his shares to Shumaker and Bagnal.
In promoting Village Pond, Shumaker and Bagnal were key figures. The brochure which was given to prospective purchasers boasted of the “Creative Team at Village Pond.” The “Creative Team” section of the brochure contained flattering dossiers of Bagnal, Shumaker, and Lang. J. Allen Shumaker was also interviewed by The State newspaper and an article was published on March 3,1983. In the article, Shumaker was described as one of the “partners of Innovative Developers, Inc.” The newspaper article and the brochure listed amenities in Village Pond which were never provided.
Lang was initially responsible for the marketing of Village Pond units. In 1986, however, Lang left Innovative and Shumaker assumed the marketing responsibilities. The Plaintiffs complained to Innovative that the promised amenities had not been built. Finally, in 1988, Bagnal met with the homeowners and promised that the amenities would be built. When the amenities did not materialize, the Plaintiffs brought suit.
At the end of the Plaintiffs’ case, defendants Bagnal and Shumaker moved for summary judgment from personal liability. The Plaintiffs’ attorney requested the trial judge rule that Bagnal and Shumaker were “controlling persons” of the corporation such that they would be personally liable under the *289South Carolina Unfair Trade Practices Act. The trial judge ruled that the doctrine of “controlling person” did not apply in a private cause of action under the South Carolina Unfair Trade Practices Act. Based on this ruling, the trial judge limited the jury to considering only those acts where Bagnal and Shumaker dealt directly with the homeowners.
LAW/ANALYSIS
S.C. Code Ann. § 39-5-20(a) (1985) declares unlawful in this state “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” S.C. Code Ann. § 39-5-140(a) (19850 creates a private right of action in any person who has suffered “ascertainable loss” because of the unfair trade practices of another “person.” The Attorney General may also bring an action under S.C. Code Ann. § 39-5-50 and 110 (1985). Thus, the South Carolina Unfair Trade Practices Act creates a civil cause of action in both the injured party and the Attorney General. In contrast, under the Federal Unfair Trade Practices Act, there is no private cause of action. See e.g. American Air Lines v. Christensen, 967 F. (2d) 410 (10th Cir. 1992).
Notwithstanding the complete absence of a private cause of action under the Federal Unfair Trade Practices Act, the South Carolina General Assembly directed the courts to be guided by “interpretations given by the Federal Trade Commission and the Federal Courts” in defining activities which violate S.C. Code Ann. § 39-5-20(a) (1985). S.C. Code Ann. § 39-5-20(b) (1985).
Under S.C. Code Ann. § 39-5-10 (1985), “person” is defined as “natural persons, corporations, trusts, Partnerships, incorporated or unincorporated associations and any other legal entity.” There is but one definitional section in the South Carolina Unfair Trade Practices Act.
The term “Controlling person,” for the purposes of the South Carolina Unfair Trade Practices Act, first appeared in State ex rel. McLeod v. Brown, 278 S.C. 281, 294 S.E. (2d) 781 (1982). In Brown, this court held summary judgment inappropriate as there was an issue of fact as to whether the defendant was a “controlling person” of the corporation such that he would be subject to personal liability under the South Carolina Unfair Trade Practices Act. Since Brown, the Court of *290Appeals has twice held a “controlling person” of the corporation may be liable under the South Carolina Unfair Trade Practices Act. See State ex rel. Medlock v. Nest Egg Society Today, Inc., 290 S.C. 124, 348 S.E. (2d) 381 (Ct. App. 1986); State ex rel. McLeod v. C. & L. Corp., Inc., 280 S.C. 519, 313 S.E. (2d) 334 (Ct. App. 1984).
While Brown, Nest Egg and C&L Corporation were all actions brought by the Attorney General, there remains only one definition of “person” under the South Carolina Unfair Trade Practices Act just as there is but one section declaring unlawful acts. Under the majority view expressed in the opinion, “person” as defined in S.C. Code Ann. § 39-5-10(a) (1985) means one thing for a private cause of action and another for a cause of action brought by the Attorney General. This is not in accord with South Carolina’s statutory scheme. The legislature created a private cause of action in South Carolina as well as an action by the Attorney General. The clear directive is to provide a more expansive Unfair Trade Practices Act in South Carolina than the Federal Unfair Trade Practices Act. In my view, if the General Assembly intended for “person” to mean one thing for a private cause of action and another for an action by the Attorney General, it could have so provided.
Moreover, this is a case involving the purchase of homes by the plaintiffs. In recent years, this Court has greatly expanded the liability of developers and builders in the area of new residential housing. See e.g. Kennedy v. Columbia Lumbar Manufacturing Company, Inc., 299 S.C. 335, 384 S.E. (2d) 730 (1989). In C&L Corporation, Inc., supra, the Court of Appeals held, under remarkably similar facts as the instant case, that the principals of the developer corporation were “controlling persons” and as such, they were subject to personal liability under the South Carolina Unfair Trade Practices Act. Specifically, the Court of Appeals held that “the broad definition of ‘person’ in the Act reaches controlling persons of a corporation.” Id. 280 S.C. at 530, 313 S.E. (2d) at 341. I see no policy reason for holding “controlling persons” liable when suit is brought by the Attorney General under the South Carolina Unfair Trade Practices Act, and exonerating “controlling persons” of the corporations when the injured party brings the action.
The Legislature provided clear and unmistakable differ*291enees between a private cause of action and an action brought by the Attorney General under the South Carolina Unfair Trade Practices Act. Compare e.g. S.C.Code Ann. § 39-5-140(a)(1985) (establishing private cause of action and damages) and § 39-5-110 (1985) (establishing civil action in Attorney General and penalties). The definition of “person,” however, is not among the differences.
In my view, whether Bagnal and Shumaker are personally liable for Innovative’s UTPA violations is dependant on whether they “personally committed], participate^] in, directed], or authorized] the commission of a violation of UTPA.” Ante at 38.1 The jury should have made that determination. I would hold the trial judge erred as a matter of law in removing from the jury’s consideration the personal liability of Bagnal and Shumaker as “controlling persons.” For the reasons stated herein, I would REVERSE and REMAND for a new trial.
Finney, J., concurs.
ORDER
Oct. 19,1994
We granted appellants’ petition for rehearing. After reconsideration, we adhere to the original majority opinion. Plowman v. Bagnal, Op. No. 24090, — S.E. (2d) — (S.C. Sup. Ct. filed June 13, 1994) (Davis Adv. Sh. No. 14 at 5).
(s') A. Lee Chandler C.J.
(s') James E. Moore A.J.
(s') John H. Waller Jr. A. J.
We adhere to the original dissent.
(s') Ernest A. Finnev. Jr. A.J.
(s') Jean H. Toal A.J.

 The majority states “[i]n accordance with this settled principle, we hold that in private actions under the UTPA, directors and officers are not liable for the corporation’s unfair trade practices unless they personally commit, participate in, direct or authorize the commission of a violation of the UTPA.” [citations omitted] [emphasis added]. Notwithstanding this specific holding in the case at bar, the majority goes on to find two definitions of “person” under S.C. Code Ann. § 39-5-10(a) where I find but one.