Murray v. The Estate of William E. Murray ( 2022 )

THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Elizabeth Murray as Personal Representative of the
Estate of Minnie H. Murray and Elizabeth Stylesetters,
Appellants,
v.
The Estate of William E. Murray, Respondent.
Appellate Case No. 2018-001680
Appeal from Charleston County
Jennifer B. McCoy, Circuit Court Judge
Tamara C. Curry, Probate Court Judge
Opinion No. 5890
Heard April 15, 2021 – Filed January 19, 2022
AFFIRMED
George J. Kefalos, of George J. Kefalos, PA; Oana
Dobrescu Johnson, of Oana D. Johnson, Attorney at Law;
and Barry I. Baker, of Baker & Varner, LLC, all of
Charleston; and Stephen Michael Slotchiver, of
Slotchiver & Slotchiver, LLP, of Mount Pleasant, all for
Appellants.
Robert H. Hood and Mary Agnes Hood Craig, of Hood
Law Firm, LLC, both of Charleston; Jean Marie
Jennings, of Charleston; and Deborah Harrison Sheffield,
of Columbia, all for Respondent.
LOCKEMY, A.J.: Appellants Elizabeth Murray, as personal representative of the
Estate of Minnie H. Murray (Mother's Estate), and Elizabeth Stylesetters
(Stylesetters) (collectively, Appellants) appeal the circuit court's ruling affirming
the probate court's order granting summary judgment in favor of the Estate of
William E. Murray (Murray's Estate). Appellants argue the circuit court erred in
finding that (1) Mother's Estate lacked standing to bring its claim against Murray's
Estate, (2) the statute of limitations and laches barred Mother's Estate's claim, and
(3) judicial estoppel barred Stylesetters' claim. We affirm.
FACTS AND PROCEDURAL HISTORY
William E. Murray (Murray) and Minnie Murray (Mother) were married in the
State of New York. The couple had three daughters: Pamela Murray1 was born in
1951; Elizabeth Murray (Elizabeth) was born in 1953; and Catherine Murray was
born in 1954 (collectively, Daughters). Mother passed away in 1967 shortly after
the couple divorced. Murray passed away on August 4, 2007. James Ma and
Hilton Smith, husband of Catherine Murray, were appointed as co-personal
representatives of Murray's Estate. Elizabeth filed two creditor's claims against
Murray's Estate on June 3, 2008: the first claim was for $6,260,845.70 on behalf of
Mother's Estate, and the second claim was for $538,034.00 on behalf of Elizabeth's
business, Stylesetters.
During their marriage, Mother pledged personal securities as collateral for a loan
of $142,685 to Murray. Murray acknowledged this debt as valid and owing when
the parties divorced in March of 1967, and that debt was subsequently transferred
to Mother's Estate upon her death in June of 1967. In 1975, Elizabeth was
appointed as the administrator of Mother's Estate.2
In 1980, Daughters, as the beneficiaries of Mother's Estate, entered an agreement
with Murray (the 1980 Agreement) concerning the outstanding debt he owed to
Mother's Estate. Murray agreed the outstanding balance of the loan was $240,000.
The 1980 Agreement provided, "Daughters, [Mother's] Estate, and [Murray] wish
to conclude the administration of the Estate of the late Minnie Holmes Murray,
mother of Daughters and former wife of [Murray]; and thereby to establish the
trust under the Will of [Mother] . . . ." Murray acknowledged he was indebted to
Mother's Estate and agreed to pay $240,000 plus interest to Mother's Estate in
1
Pamela passed away during the pendency of this case.
2
Elizabeth was appointed after the original administrator was removed for
malfeasance.
yearly installments. For the years 1980, 1981 and 1982, Murray was to pay
interest only, which was $19,200 per year; thereafter, he was to pay principal and
accrued interest, amortized over a period of ten years. The 1980 Agreement
provided the indebtedness bore interest of 8% per annum but the failure to make
any payments when due would trigger an automatic increased interest rate of 12%
per annum for the period of the unpaid installment. In addition, Murray agreed to
maintain and pay premiums upon a $385,000 life insurance policy that was
previously transferred to Mother's Estate. Murray made six payments on the debt
until 1986 and made no further payments. He also stopped paying premiums on
the life insurance policy.
In December 1992, Daughters reached an agreement among themselves regarding
the outstanding debt. The agreement provided,
This letter constitutes an agreement by and between
Pamela Murray Stack, Elizabeth E. Murray[,] and
Catherine Peronneau Murray Smith, the three
beneficiaries of the Estate of Minnie Holmes Murray,
Deceased, that the total obligation owing from William
E. Murray to the Estate as outlined in a prior agreement
dated April 22, 1980 between William E. Murray and the
above-mentioned three beneficiaries, as well as accrued
interest, penalty interest, interest owed on his loans from
the New England Life Insurance policy, as well as the
accrued interest thereon and other monies which may
become due, shall become community property between
Pamela Murray Stack, Elizabeth E. Murray[,] and
Catherine Peronneau Murray Smith on a joint, not several
basis. Any monies remitted thereon to any one or more
beneficiaries shall impose and constitute liability and
obligation on that beneficiary(ies) to remit a pro-rata
share to the other parties to this agreement.
Smith testified in a deposition that he assisted Daughters with Mother's Estate in
the weeks prior to the 1992 Agreement. The record contains letters from Smith
suggesting Daughters intended to liquidate the estate when they entered the 1992
Agreement. Smith agreed that in 1995, Murray presented a financial summary to
his bank and the Small Business Administration acknowledging that he owed $1.4
million to Mother's Estate. Elizabeth testified during her March 2015 deposition
that although Mother's Estate made distributions in 1992, the estate only partially
liquidated its assets, and she never filed a release and discharge with the probate
court.
Elizabeth wrote several letters to Murray from 1998 to 2006, in which she
reminded him of the outstanding debt. The following are excerpts from Elizabeth's
February 2006 letter to Murray, which Elizabeth did not discover until February
2009:
I need you to formally certify below that you are in
agreement with your original stated obligation to
Mommy's Estate, . . . which is now over $5 million per
the computation attached for your examination.
I must have you, as soon as possible, memorialize
this agreement that those monies are due, as outlined in
the 1980 agreement (see attached), by you to her Estate,
whether on a currently due basis or as part of debt that
will be due upon your death as a valid claim to the three
of us.
....
. . . . I must ask you affirm this decades old debt owed to
your first three children, which you have always stated is
your intention, both legally and as our father.
....
Thank you for making this issue one of the past
and not one of the future. I love you and want the best
for you for many years to come but this is both a[] legal
Agreement as well as an "honor debt." I have delayed
enforcing its collection in trust of your advi[c]e and
counsel, and as your daughter. But this is a legal
responsibility for me and I need you to respect my
position as someone trusting in you to do the right thing,
especially since I have followed your legal counsel with
respect to my position as Executrix.
Attached to the letter was a copy of the 1980 Agreement and the payment
schedule. A signature purporting to be Murray's appears at the end of the letter.
Murray was diagnosed with Parkinson's disease in 2001 when he was in his
seventies, and the parties dispute whether Murray in fact signed the letter as well as
whether he possessed the requisite mental capacity to do so.3
From 1999 until 2002, Elizabeth worked for Murray at his property, the Inn at
Quogue, in New York. In her deposition, Elizabeth stated she expended "hundreds
of thousands of dollars and interest thereon" to pay expenses at the Inn, including
renovation, delivery bills, and payroll. She contended Murray agreed to pay her, as
owner of Stylesetters, $2,000 per month towards those services, and that he made
monthly payments on the debt until July 2007. Smith acknowledged Murray gave
Elizabeth a monthly allowance of $3,000. He stated that to his knowledge, these
payments were unrelated to the alleged debt due Elizabeth from the Inn at Quogue.
Elizabeth testified Murray began paying her a $3,000 monthly allowance in 2003
and continued until 2006. She stated the payments Murray made from 2006
onward included $2,000 per month toward the Inn at Quogue debt.
Elizabeth asserted that a letter dated July 21, 2007, 4 evidenced Murray's agreement
to repay her for her expenditures at the Inn of Quogue. In the July 21, 2007 letter,
which Murray purportedly wrote and signed, Murray stated,
Elizabeth is to receive the principal sum of $117[,000]
plus accrued credit card and cash line of credit interest
from proceeds upon the sale of the Inn at Quogue . . . .
Such payments shall be for items purchased by her for
or . . . used by the Inn, cash advances used to support
payroll and emergency expenses related to her work
there, [and] her past due payroll for design work . . . .
I have made various payments from my personal account
at a rate of $2,000 per month, which payments began in
January[] 2006.
3
These disputed facts are not at issue on appeal.
4
The heading of the letter reflects the date June 21, 2007; however, the letter
reflects the witnesses—Larry Bump and Jeffrey Young—witnessed Murray's
signature on July 21, 2007. Bump and Young both testified they witnessed Murray
sign the letter on July 21, 2007.
Murray's Estate filed notices of disallowance of claim as to the claims of both
Mother's Estate and Stylesetters, and Appellants subsequently filed a petition for
allowance of claim for both claims. After a lengthy discovery, Murray's Estate
moved for summary judgment on October 31, 2016. The probate court heard the
motion in July 2017 and took the matter under advisement. Thereafter, the probate
court granted summary judgment in favor of Murray's Estate.
First, the probate court found Mother's Estate lacked standing because any
obligation due under the 1980 Agreement was due to Daughters jointly and not to
Mother's Estate. The probate court reasoned Daughters agreed to transfer the debt
to themselves jointly in the 1992 Agreement, and Elizabeth stated in her 2013
affidavit that all obligations due under the 1980 Agreement were community
property between Daughters. Second, the court found the claims of Mother's
Estate were barred by the statute of limitations pursuant to section 15-3-530 of the
South Carolina Code (2005)5 and 62-3-802 of the South Carolina Code (Supp.
2020)6 because Murray last paid on the debt on February 24, 1986. Moreover, the
probate court concluded the February 9, 2006 letter did not revive the debt because
it was not a clear and explicit promise to pay the debt or an unqualified and
unequivocal admission that the debt was still due. Third, the court found Mother's
Estate's claims were barred by the doctrine of laches. Finally, as to Stylesetters'
claim, the probate court found it was judicially estopped from making this claim
based up on a position Elizabeth took in a 2006 action involving a trust.
Appellants appealed to the circuit court, which affirmed the probate court's grant of
summary judgment for the same reasons the probate court provided. This appeal
followed.
ISSUES ON APPEAL
1. Did the circuit court err by finding Mother's Estate did not have standing to
prosecute its claim against Murray's Estate based upon an agreement among
Daughters as to how they would divide the proceeds due to Mother's Estate?
2. Did the circuit court err by concluding Mother's Estate's claim was barred by
the statute of limitations or the doctrine of laches?
5
(providing the statute of limitations for "an action upon a contract, obligation, or
liability, express or implied" is three years).
6
(providing "no claim which was barred by any statute of limitations at the time of
the decedent's death shall be allowed or paid").
3. Did the circuit court err by granting summary judgment as to Stylesetters' claim
based on a theory of judicial estoppel?
STANDARD OF REVIEW
When reviewing a grant of summary judgment, appellate
courts apply the same standard that governs the trial court
under Rule 56(c), SCRCP, which provides that summary
judgment is proper when there is no genuine issue as to
material fact and the moving party is entitled to judgment
as a matter of law.
S.C. Pub. Interest Found. v. S.C. Dep't of Transp., 421 S.C. 110, 117, 804 S.E.2d
854, 858 (2017). "This Court reviews all ambiguities, conclusions, and inferences
arising in and from the evidence in a light most favorable to the non-moving party
below." Id.LAW AND ANALYSIS
A. Mother's Estate
1. Standing
Mother's Estate argues the circuit court erred by concluding the 1992 Agreement
constituted a transfer of the debt from Mother's Estate to Daughters. Mother's
Estate contends Daughters agreed among themselves as to how they would hold
the proceeds of the claim once it was liquidated and did nothing to transfer
ownership of the claim from Mother's Estate to themselves or change the real party
in interest. We agree.
"A plaintiff must have standing to institute an action." Sloan v. Greenville County,
356 S.C. 531, 547, 590 S.E.2d 338, 347 (Ct. App. 2003). "Standing refers to a
party's right to make a legal claim or seek judicial enforcement of a duty or right."
Bank of Am., N.A. v. Draper, 405 S.C. 214, 219, 746 S.E.2d 478, 480 (Ct. App.
2013) (quoting Powell ex rel. Kelley v. Bank of Am., 379 S.C. 437, 444, 665 S.E.2d
237, 241 (Ct. App. 2008)).
To have standing . . . one must be a real party in interest.
A real party in interest is one who has a real, material, or
substantial interest in the subject matter of the action, as
opposed to one who has only a nominal or technical
interest in the action.
Sloan, 356 S.C. at 547, 590 S.E.2d at 347 (omission in original) (quoting
Charleston Cnty. Sch. Dist. v. Charleston Cnty. Election Comm'n, 336 S.C. 174,
181, 519 S.E.2d 567, 571 (1999)). Rule 17(a), SCRCP provides:
(a) Real Party in Interest. Every action shall be
prosecuted in the name of the real party in interest. An
executor, administrator, guardian, bailee, trustee of an
express trust, a party with whom or in whose name a
contract has been made for the benefit of another, or a
party authorized by statute may sue in his own name
without joining with him the party for whose benefit the
action is brought; and when a statute so provides, an
action for the use or benefit of another shall be brought in
the name of the State. No action shall be dismissed on
the ground that it is not prosecuted in the name of the real
party in interest until a reasonable time has been allowed,
after objection, for ratification of commencement of the
action by, or joinder or substitution of, the real party in
interest; and such ratification, joinder, or substitution
shall have the same effect as if the action had been
commenced in the name of the real party in interest.
"[T]he burden of compliance with Rule 17(a) and its real party in interest
requirement falls to the plaintiff." Fisher ex rel. Estate of Shaw-Baker v.
Huckabee, 422 S.C. 234, 241, 811 S.E.2d 739, 742 (2018). "Under ordinary
circumstances, the Probate Code grants the personal representative the exclusive
authority to bring civil actions . . . on behalf of an estate." Id. at 238, 811 S.E.2d at
741. "The requirement of standing is not an inflexible one." Draper, 405 S.C. at
220, 746 S.E.2d at 481 (quoting Sloan v. Sch. Dist. of Greenville Cnty., 342 S.C.
515, 524, 537 S.E.2d 299, 304 (Ct. App. 2000)).
As an initial matter, in its August 15, 2014 order, the probate court recognized
Elizabeth as the appointed foreign personal representative of Mother's Estate
pursuant to sections 62-4-204 and 62-4-205 of the South Carolina Code (Supp.
2020). Murray's Estate has not challenged this, and therefore Elizabeth was
authorized to maintain actions on behalf of Mother's Estate in South Carolina. See
S.C. Code Ann. § 62-3-703(c) (Supp. 2020) ("[A] personal representative of a
decedent domiciled in this State at his death has the same standing to sue and be
sued in the courts of this State and the courts of any other jurisdiction as his
decedent had immediately prior to death."); § 62-4-204 ("[A] domiciliary foreign
personal representative may file with a court in this State in a county in which
property belonging to the decedent is located, authenticated copies of his
appointment and of the will, if any."); § 62-4-205 ("A domiciliary foreign personal
representative who has complied with Section 62-4-204 may exercise as to assets
(including real and personal property) in this State all powers of a local personal
representative and may maintain actions and proceedings in this State . . . .").
Although the record contains a document that Daughters signed purporting to
relieve Elizabeth as personal representative, the record does not indicate this
document was ever filed with the probate court of New York. Elizabeth testified
Mother's Estate remained active, that the 1992 distribution only partially liquidated
the estate, and that she was never released as personal representative. The
evidence therefore indicates Mother's Estate was never closed. The 1992
Agreement was among Daughters, and Mother's Estate was not a party to that
agreement. We do not believe the 1992 Agreement transferred the debt from
Mother's Estate to Daughters. Rather, Murray's obligation to pay the debt was an
obligation to Mother's Estate, and Mother's Estate retained the right to enforce the
debt and was therefore the real party in interest. Accordingly, we conclude
Mother's Estate, and Elizabeth, as personal representative of Mother's Estate, had
standing to bring the claim.
2. Statute of Limitations
Mother's Estate argues the question of whether Murray reaffirmed the debt was a
question of fact and the circuit and probate courts erred by deciding such question
as a matter of law. Specifically, Mother's Estate contends the question of whether
Murray intended for his signature on the February 9, 2006 letter to show his intent
to repay the debt was a question of fact. It asserts the letter "explicitly asked Mr.
Murray to acknowledge the debt was still owed and that it would be paid." We
disagree.
In the February 9, 2006 letter, Elizabeth asked Murray to certify that he was in
"agreement with [his] original stated obligation to M[other]'s Estate." She also
wrote,
I must have you, as soon as possible, memorialize this
agreement that those monies are due, as outlined in the
1980 agreement (see attached), by you to her Estate,
whether on a currently due basis or as part of debt that
will be due upon your death as a valid claim to the three
of us.
In affirming the probate court's order, the circuit court assumed for purposes of
summary judgment that Murray signed the February 9, 2006 letter. The circuit
court found that as a matter of law the letter did not constitute a new promise to
pay the debt. Although the parties dispute the authenticity of his signature—and
whether he was competent to sign such a document at the time—these questions
are not at issue on appeal.
"Actions to recover debts in South Carolina must generally be brought within three
years of the default on the debt. This bar only effects the remedy available to a
collecting party rather than the underlying right: it does not erase the debt." In re
Vaughn, 536 B.R. 670, 677 (Bankr. D.S.C. 2015) (citation omitted); see also
§ 15-3-530. "No acknowledgment or promise shall be sufficient evidence of a new
or continuing contract whereby to take the case out of the operation of this statute
unless it be contained in some writing signed by the party to be charged thereby."
S.C. Code Ann. § 15-3-120 (2005). However, "payment of any part of principal or
interest is equivalent to a promise in writing." Id."Whether an instrument purporting to be an acknowledgment of a debt is sufficient
to take it out of the bar of the statute of limitations is a question for the court, but
whether the debt sued for is the one acknowledged is a question for the jury." Hill
v. Hill, 51 S.C. 134, 140, 28 S.E. 309, 312 (1897) (quoting 1 Thomp. Trials
§ 1268).
"After the statute [of limitations] has run out, there must be 'an express promise to
pay, or an admission of a subsisting debt which the party is willing and liable to
pay.'" Horlbeck v. Hunt, 26 S.C.L. (1 McMul.) 197, 200-01 (1841). "[I]f there be
an unequivocal admission, that [the debt] is due and unpaid, unaccompanied by
any expression, declaration, or qualification, indicative of an intention not to pay,
the state of facts on which the law implies a promise, is then present, and the party
is bound by it." Id. at 201 (quoting Young v. Monpoey, 18 S.C.L. (2 Bail. 280) 278
(1830)); see also Suber v. Richards, 61 S.C. 393, 403, 39 S.E. 540, 543 (1901)
(stating the writing must "recognize an existing debt . . . [and] should contain
nothing inconsistent with an intention on the part of the debtor to pay it" (quoting
Manchester v. Braender, 14 N.E. 405, 406 (N.Y. 1887)). "Such new
promise . . . must amount to an unqualified admission of a subsisting legal liability
and must be established by evidence unambiguous and full." Black v. White, 13
S.C. 37, 40 (1880).
In Horlbeck v. Hunt, the court found no implied promise to pay the debt when the
defendant debtor acknowledged he owed the debt but stated he could not pay it and
that it would have to "come in with his other debts." 26 S.C.L. at 197-98. The
court reasoned that although the debtor admitted the debt was due and unpaid, such
admission was "accompanied by a plain expression that the [debtor] did not intend
to pay, when he said 'he could not pay,' and when he declined [an] . . . offer to
settle by note or bond on his own time.'" Id. at 201. The court concluded the
debtor's other observation that the debt "must come in to be paid with [his] other
debts" was "no undertaking to pay it" but simply meant the debt must "take its
chance for payment with [his] other debts." Id. at 201. Viewing the debtor's
statements as a whole, the court found that although "the defendant admitted that
the debt once was due, and might once have been paid, . . . he declined to admit
either his liability or willingness to pay." Id. at 201.
In Hill, the appellate court concluded statements a debtor made in letters he wrote
to his creditors were sufficient to imply a new promise to pay. 51 S.C. at 141, 28
S.E. at 312. The debtor wrote four separate letters to his creditors, and expressed
in each letter his intention to repay the debt, offering notes and real estate securities
to satisfy the debt. Id. at 140-41, 28 S.E. at 311. In the final letter he stated, "[D]o
not understand me to say that I do not mean to pay, for I expect to pay every dollar
of it." Id. The court concluded the letters constituted an "unqualified and
unequivocal admission that a debt [wa]s still due, unaccompanied by any
expression indicative of an intention not to pay, as would imply a promise to pay."
Id. at 140-41, 28 S.E. at 312.
In Black v. White, our supreme court held an administrator's mere inclusion of a
debt upon the inventory of his intestate's estate did not constitute "an unqualified
admission of a subsisting legal liability." 13 S.C. at 40-41. Similarly, applying
South Carolina state law, the bankruptcy court in In re Vaughn, concluded that the
mere listing of a debt as a claim on her bankruptcy schedules was insufficient to
imply a new promise to pay such that the statute of limitations did not bar the debt.
536 B.R. at 677-79.
Here, although the 2006 letter identified the specific debt and acknowledged the
debt was "due," it then stated Murray owed the debt to Mother's Estate "whether on
a currently due basis or as part of debt that will be due upon [Murray's] death as a
valid claim to [Daughters]." A statement that the debt was either currently due or
alternatively would be due upon Murray's death was not an unequivocal admission
the debt was due. Although Murray did not expressly refuse to pay the debt, he
essentially just established options, which was inconsistent with an intention to
repay it. See Suber, 61 S.C. at 403, 39 S.E. at 543 (stating the writing must
"recognize an existing debt . . . [and] should contain nothing inconsistent with an
intention on the part of the debtor to pay it" (quoting Manchester, 14 N.E. at 406)).
Such language merely suggests this debt must simply take its chances with other
debts. See Horlbeck, 26 S.C.L. at 201 (finding the debtor's observation that the
debt "must come in to be paid with [his] other debts" was "no undertaking to pay
it" but simply meant the debt must "take its chance for payment with [his] other
debts."); Black, 13 S.C. at 40-41 (holding an administrator's mere inclusion of debt
upon the inventory of his intestate's estate did not constitute "an unqualified
admission of a subsisting legal liability"); In re Vaughn, 536 B.R. at 678 (applying
South Carolina state law on debt revival and stating "a mere acknowledgement of a
debt as a debt that will be paid in accordance with other debts does not revive the
debt"). Moreover, the letter indicated the debt was due "both legally and as our
father" and referred to the debt as an "honor debt." These statements were
equivocal because by signing the letter, Murray seems to have acknowledged only
a moral obligation and not a legal one to repay this debt that is now over two
decades old. Because the letter contained equivocal language and an expression
that was inconsistent with Murray's intent to repay the debt, we find this letter was
insufficient to demonstrate an unequivocal admission that the debt was due and
unpaid. Accordingly, we affirm the circuit court's grant of summary judgment in
favor of Murray's Estate as to this issue.
3. Laches
Mother's Estate contends laches is an equitable defense that does not apply to a
legal claim to collect on a debt. On the merits, it argues any delay in asserting the
claim was understandable given Daughters' relationship with Murray and the fact
Smith periodically undertook to advise Daughters how to preserve the ongoing
validity of the debt. Further, Mother's Estate asserts the accrual of substantial
interest was of Murray's making because he could have paid the debt at any time
either before or after his death. We find the doctrine of laches was inapplicable
because this case involved a legal claim to collect on a debt. See Edens v. Edens,
312 S.C. 488, 491, 435 S.E.2d 851, 852 (1993) ("The statute of limitations rather
than laches applies to all legal claims against an estate."). Rather, as we
concluded, the statute of limitations barred the claims of Mother's Estate.
B. Stylesetters
Judicial Estoppel
Stylesetters argues Murray reaffirmed the debt and his intention to repay it in a
letter dated July 21, 2007. Stylesetters asserts the circuit court erred in concluding
the viability of the claim turned on Murray's competence. Stylesetters contends
that even without the 2007 letter, the debt remained valid because Murray made
payments on the debt from 2006 until May of 2007. Sytlesetters argues the circuit
court erred by finding judicial estoppel barred its claim because Elizabeth never
took a position as to Murray's competency in the 2006 trust litigation and no
judicial determination was made as to his competence in that action. We disagree.
"Judicial estoppel precludes a party from adopting a position in conflict with one
earlier taken in the same or related litigation." Hayne Fed. Credit Union v.
Bailey, 327 S.C. 242, 251 489 S.E.2d 472, 477 (1997). "Judicial estoppel comes
into play when the court is forced to take a position based on a factual assertion."
Hawkins v. Bruno Yacht Sales, Inc., 353 S.C. 31, 43, 577 S.E.2d 202, 208 (2003);
see also Commerce Ctr. of Greenville, Inc. v. W. Powers McElveen & Assocs.,
Inc., 347 S.C. 545, 554 n.6, 556 S.E.2d 718, 723 n.6 (Ct. App. 2001) ("The
doctrine generally applies only to inconsistent statements of fact.").
When a party has formally asserted a certain version of
the facts in litigation, he cannot later change those facts
when the initial version no longer suits him. . . . [T]he
truth-seeking function of the judicial process is
undermined if parties are allowed to change positions as
to the facts of the case, unless compelled by
newly-discovered evidence.
Hayne Fed. Credit Union, 327 S.C. at 252, 489 S.E.2d at 477 (footnote omitted).
"The purpose of the doctrine is to ensure the integrity of the judicial process, not to
protect the parties from allegedly dishonest conduct by their adversary." Cothran
v. Brown, 357 S.C. 210, 215, 592 S.E.2d 629, 631 (2004). It "is an equitable
concept and should be applied sparingly, with clear regard for the facts of the
particular case. The application of judicial estoppel must be determined on a
case-by-case basis, and must not be applied to impede the truth-seeking function of
the court." Id. at 216, 592 S.E.2d at 632.
[T]he following elements [are] necessary for the doctrine
to apply: (1) two inconsistent positions taken by the same
party or parties in privity with one another; (2) the
positions must be taken in the same or related
proceedings involving the same party or parties in privity
with each other; (3) the party taking the position must
have been successful in maintaining that position and
have received some benefit; (4) the inconsistency must
be part of an intentional effort to mislead the court; and
(5) the two positions must be totally inconsistent.
Id. at 215-16, 592 S.E.2d at 632. "[T]he term 'privity,' when applied to a judgment
or decree, means one so identified in interest with another that he represents the
same legal right." Carrigg v. Cannon, 347 S.C. 75, 80, 552 S.E.2d 767, 770 (Ct.
App. 2001) (alteration in original) (quoting Ex parte Allstate Ins. Co., 339 S.C.
202, 207, 528 S.E.2d 679, 681 (Ct. App. 2000)).
In 2006, Elizabeth was involved in litigation in New York pertaining to Murray's
position as trustee of the Samuel Freeman Charitable Trust (the Trust Litigation).
Elizabeth and her sister Pamela filed a verified answer and cross-petition, alleging
the following: "Over the past several years [Murray]'s physical and mental
competency have become severely impaired. As of this date he is unable to fully
focus upon, understand, and deal with basic and fundamental business and
financial matters. Accordingly, he is regrettably no longer able to fulfill the duties
of Chairman of the Trust." Elizabeth additionally alleged Murray "lacked and
lacks the requisite mental capacity to intelligently and knowingly execute a
document that purported to remove [her] . . . as a Trustee." She claimed "[he]
suffered a significant stroke" and was involved in a "major automobile accident" in
1992 and that these incidents were followed by a series of "mini-strokes" that left
his "mental capacities increasingly impaired." Elizabeth further alleged he
suffered another stroke in 1999, further impairing his ability to reason, use simple
vocabulary, and recall the names of people and places. She stated that
subsequently in 2003, due to the effects of Parkinson's syndrome, he became
increasingly unable to verbalize his thoughts and intentions and that his condition
had deteriorated even further. Specifically, Elizabeth asserted that in August 2003
he was a in a state of confusion about dates, times, events, and places. The probate
court concluded Stylesetters' claim, which was based on the July 2007 letter, was
judicially estopped based on Elizabeth's statements regarding Murray's capacity in
her verified answer and cross-petition. The probate court also noted Elizabeth
alleged Murray lacked capacity in a July 2007 guardianship proceeding, however,
the petitioner named on that document was Pamela, not Elizabeth.
We find the circuit court did not err in affirming the probate court's application of
judicial estoppel. As to the first element, Elizabeth and Stylesetters were in privity
with one another. Elizabeth brought the creditor's claim against Murray's Estate on
behalf of her business, Stylesetters. Elizabeth testified Stylesetters was a sole
proprietorship "doing business as" itself. Elizabeth Stylesetters and Elizabeth
Murray, therefore, are not distinct entities. See Moore v. Moore, 360 S.C. 241,
259, 599 S.E.2d 467, 476 (Ct. App. 2004) ("Because Appellant's business was a
sole proprietorship, he and his business were not distinct entities."); Auto-Owners
Ins. Co. v. Rhodes, 405 S.C. 584, 600, 748 S.E.2d 781, 789 (2013) (noting a "sole
proprietorship form of business provides complete identity of the business entity
with the proprietor himself" (quoting Bushey v. N. Assurance Co. of Am., 766 A.2d
598, 603 (Md. 2001))). Elizabeth took two inconsistent positions: in the Trust
Litigation, she claimed Murray lacked competence to remove her as trustee and
that his competency steadily declined over a period of years leading up to that
litigation; in this case, she claims that only eight months later he was competent to
acknowledge a debt of more than $100,000. Therefore, the first element of judicial
estoppel is met.
As to the second element, the Trust Litigation involved Elizabeth, and as we stated,
Elizabeth and Stylesetters were in privity. Although this case and the Trust
Litigation involved different types of claims, both cases presented a question of
fact concerning Murray's competence and how his competence or lack thereof
affected the conduct at issue. There, it was Murray's decision to remove Elizabeth
as trustee. Here, it was his recognition of an agreement to repay a substantial debt
to Elizabeth's business. In either case, Murray's competence would have been a
significant issue in a trial on the merits. Therefore, we find the second element of
judicial estoppel is met.
As to whether Elizabeth was successful in maintaining an inconsistent position in
the related litigation and received a benefit, we find this element was met.
Although the Trust Litigation settled and there was no judicial determination as to
Murray's mental capacity, Elizabeth was reinstated as trustee and therefore
received a benefit. Therefore, we find the third element of judicial estoppel is met.
Next, the record shows the inconsistency was part of an intentional effort to
mislead. Stylesetters argues it never took a position on Murray's competency in
the Trust Litigation. Because of the relationship between Elizabeth and
Stylesetters, this claim is disingenuous and suggests an intentional effort to mislead
the court. In her answer and cross-petition in the Trust Litigation, Elizabeth stated
Murray's "mental competency" had "become severely impaired" over the last
several years. She stated he was "unable to fully focus upon, understand, and deal
with basic and fundamental business and financial matters" as of the date of that
filing, which was November 17, 2006. She made several additional
representations concerning his mental faculties in that pleading. For example, she
asserted, "any purported removal of Elizabeth as a trustee was ineffective as a
matter of law on the ground, among others, that [Murray] lacked and lacks the
requisite mental capacity to intelligently and knowingly execute a document that
purported to remove [her] as trustee." In this case, she asserts Murray had capacity
to agree to repay her hundreds of thousands of dollars in July 2007 notwithstanding
her allegations that his mental competency had steadily declined in the years
leading up to November 2006. This demonstrated an intent to mislead the court
because Elizabeth and her business advanced whichever factual position was most
advantageous to their claims in each case. Accordingly, we find the fourth element
of judicial estoppel is met.
Finally, the positions were totally inconsistent. The periods in question were
closely related in time. In the November 17, 2006 pleading, Elizabeth claimed
Murray had suffered from the effects of Parkinson's syndrome since 2003 and had
become "increasingly unable to verbalize thoughts and intentions." She alleged his
condition continued to deteriorate thereafter and he was particularly susceptible to
the undue influence of Smith. Elizabeth sought an order declaring the documents
Murray signed purporting to remove her as trustee were "ineffective and void on
the ground that [he] lacked mental capacity to exercise such a function as
Chairman of the Trust and were the product of improper and undue influence
exercised by [Smith] over [Murray]." In this case, Stylesetters claims that about
eight months later, and a few weeks prior to his death, Murray was competent to
acknowledge a debt of hundreds of thousands of dollars. Because of the
overlapping periods and issues of competency, the positions Elizabeth and
Stylesetters took in these two cases were totally inconsistent.
Finally, although Stylesetters asserts that even excluding the July 21, 2007 letter,
Murray affirmed the debt when he continued to make monthly payments on such
debt until July 2007, neither the circuit court nor the probate court addressed this
issue in their orders granting summary judgment. We believe Stylesetters failed to
preserve any argument that Murray affirmed the debt by making the $3,000
monthly payments because it failed to file a Rule 59(e), SCRCP, motion seeking a
ruling on that issue. See Wilder Corp. v. Wilke, 330 S.C. 71, 77, 497 S.E.2d 731,
734 (1998) ("Post-trial motions are . . . used to preserve those [issues] that have
been raised to the trial court but not yet ruled upon by it.").
Based on the foregoing, we conclude the circuit court did not err by granting
summary judgment in Murray's Estate's favor as to Stylesetters' claim based on the
doctrine of judicial estoppel.
CONCLUSION
For the foregoing reasons, the circuit court's order affirming the probate court's
grant of summary judgment in favor of Murray's Estate as to the claims of Mother's
Estate and Stylesetters is
AFFIRMED.
HEWITT, J., and HUFF, A.J., concur.