Harbin v. Williams ( 2019 )

THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Jerald Lamar Harbin, Special Fiduciary of the Franklin
N. Harbin and Edna F. Harbin Living Trust, Appellant,
v.
Susan H. Williams, George T. Williams, Citifinancial
Inc., and CFNA Receivables (SC) Inc., Defendants,
Of whom Susan H. Williams is the Respondent.
Appellate Case No. 2017-001924
Appeal From Greenwood County
Donald B. Hocker, Circuit Court Judge
Published Opinion No. 5695
Submitted October 1, 2019 – Filed December 18, 2019
AFFIRMED
Charles M. Watson, Jr., of Greenwood, for Appellant.
Donna J. Jackson, of Clinton, for Respondent.
THOMAS, J: In this declaratory judgment action, Jerald Lamar Harbin, Special
Fiduciary of the Franklin N. Harbin and Edna F. Harbin Living Trust, appeals the
circuit court's denial of his motion for a directed verdict on the issue of a co-
settlor's authority to transfer property from a trust to Susan H. Williams. Jerald
argues the trial court erred in (1) denying his motion for a directed verdict; (2)
submitting the issue of a co-settlor's authority to the jury; and (3) denying his
motion for judgment notwithstanding the verdict. We affirm.
FACTS
On January 16, 2000, Franklin N. and Edna F. Harbin created the Franklin N.
Harbin and Edna F. Harbin Living Trust (the Trust). The same day, Franklin
conveyed a farm on Old Laurens Highway and the property at issue, the Harbins'
home at 313 Lakeshore Drive (the home property), to the Trust.
The Trust named Franklin and Edna as settlors of the Trust. Article 2 of the Trust
provided, "The Settlors shall act as Trustees during their lives. Upon the death or
incapacity of either Settlor, the other Settlor shall act as Trustee alone." Article 3
provided, "While both Settlors are living, either may: (1) withdraw property from
this Trust . . . ." Article 4 provided for the Trust property to be divided equally
among the children of the Trustees "[u]pon the death of both Settlors."
On March 31, 2000, Franklin and Edna conveyed the farm from the Trust to their
son, Stephen Harbin.1 Franklin died on June 23, 2000. On November 30, 2005,
Edna, acting as Trustee, conveyed the home property to herself for life with the
remainder to her daughter, Susan Williams. On January 10, 2008, Edna and Susan
mortgaged the home property. Edna died on March 21, 2011.
Jerald Harbin was appointed Special Fiduciary of the Trust and filed this action
seeking a declaration that the home property was part of the Trust. Jerald relied on
Article 3, arguing it required both settlors to be alive to withdraw property from the
Trust. Susan answered, demanding a jury trial.
At a pretrial hearing, Jerald agreed to a jury trial. Susan argued the Trust was
ambiguous. The trial court found there was "no ambiguity in the Trust document.
But, even if I were to find an ambiguity, it would be a patent ambiguity and no
extrinsic evidence is allowed . . . ." The court stated that although the Trust was
subject to different interpretations as to whether Edna had the authority to transfer
the home property, it was not "the same thing as ambiguity," and the question of
Edna's authority was for the jury. Jerald argued, "[I]n light of your rulings, there is
nothing to submit to the jury." The court disagreed.
1
There were five siblings: Michael Harbin (deceased), Jerald Harbin (the
appellant), John Randall "Randy" Harbin (deceased), Stephen Harbin, and Susan
Williams (the respondent).
At trial, James Johnson, an attorney, testified he represented Franklin and Edna.
He reviewed the Trust in 2000 and learned Susan and her husband were living with
and taking care of Franklin and Edna in the home property. Johnson met with
Franklin, Edna, and Susan to discuss the home property. However, the deed
transferring the home property to Susan was not executed until 2005, after
Franklin's death.
At the close of all evidence, Jerald moved for a directed verdict on the ground
there was no genuine issue of material fact, and he was entitled to a directed
verdict as a matter of law. The court found "the Trust document itself does create
an issue in (sic) fact." Thus, the court denied the motion. The court charged the
jury that the sole issue before it was to determine whether Edna had the authority
under the Trust to transfer the home property. The jury found Edna had the
authority under the Trust to deed the property. This appeal followed.
LAW/ANALYSIS
1. Directed Verdict
Jerald argues the trial court erred in denying his motion for a directed verdict
because he construes Article 3 as unambiguously providing that the Trust limited
the power to withdraw property specifically to the period of time when both
settlors were living. We disagree.
Article 3 provides if both settlors of the Trust are living, either may withdraw
property from the Trust. Article 2 provides for the remaining settlor, after one
settlor dies, to act as trustee alone. The Trust did not specifically grant the power
to the surviving trustee to withdraw property from the Trust. Instead, the Trust
allows a trustee "to exercise such powers as are conferred upon Trustees generally
by the Uniform Trustees Powers Act (S.C. Code Ann. 62-7-701 (1990)) . . . ."
Although the trial court stated the Trust was unambiguous, it also found the Trust
was subject to different interpretations. We agree with the latter and find a trust
that is subject to different, reasonable interpretations is inherently ambiguous. See
S.C. Dep't of Nat. Res. v. Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d
299, 302 (2001) ("A contract is ambiguous when the terms of the contract are
reasonably susceptible of more than one interpretation."). When a trust is
susceptible of more than one reasonable interpretation, a motion for a directed
verdict should be denied. See Ecclesiastes Prod. Ministries v. Outparcel Assocs.,
LLC, 374 S.C. 483, 489, 649 S.E.2d 494, 497 (Ct. App. 2007) ("If the evidence as
a whole is susceptible to more than one reasonable inference, a jury issue is created
. . . . "); Clark v. S.C. Dep't of Pub. Safety, 362 S.C. 377, 382-83, 608 S.E.2d 573,
576 (2005) (stating an appellate court will reverse a trial court's ruling "on a
directed verdict motion only where there is no evidence to support the ruling or
where the ruling is controlled by error of law"). Because we find the Trust was
susceptible of more than one reasonable interpretation regarding Edna's authority
to transfer property from the Trust after Franklin's death, we affirm the trial court's
denial of Jerald's motion for a directed verdict.
2. Submission to the Jury
Jerald argues the trial court erred in submitting the issue of Edna's authority to the
jury because either an unambiguous contract, or one with a patent ambiguity,
present questions of law to be decided by the court. We disagree.
As to Jerald's argument that the Trust was unambiguous, we already determined we
find the Trust ambiguous regarding Edna's authority to transfer Trust property after
Franklin's death. Thus, we review whether the trial court erred in submitting the
issue to the jury because any ambiguity was patent.
Jerald correctly notes that our South Carolina jurisprudence has long distinguished
between patent and latent ambiguities in determining whether extrinsic evidence
was admissible and whether the construction of an ambiguous document was a
question of law for the court or a question of fact for the jury. In Hann v. Carolina
Casualty Insurance Co., 252 S.C. 518, 524, 167 S.E.2d 420, 422 (1969) (quoting
Jennings v. Talbert, 77 S.C. 454, 456, 58 S.E. 420, 421 (1907)), our supreme court
defined the different ambiguities as follows:
Ambiguities, however, are patent and latent; the
distinction being that in the former case the uncertainty is
one which arises upon the words of the will, deed, or
other instrument as looked at in themselves, and before
any attempt is made to apply them to the object which
they describe, while in the latter case the uncertainty
arises, not upon the words of the will, deed, or other
instrument as looked at in themselves, but upon those
words when applied to the object or subject which they
describe.
Our supreme court explained the distinction more fully and discussed the
admissibility of extrinsic evidence in In re Estate of Prioleau, 361 S.C. 627, 632,
606 S.E.2d 769, 772 (2004) as follows:
Ambiguities may be patent or latent. "[T]he distinction
being that in the former case the uncertainty is one which
arises upon the words of the . . . instrument as looked at
in themselves, and before any attempt is made to apply
them to the object which they describe, while in the latter
case the uncertainty arises, not upon the words of the . . .
instrument as looked at in themselves, but upon those
words when applied to the object or subject which they
describe." In re Estate of Fabian, 326 S.C. 349, 353, 483
S.E.2d 474, 476 (Ct. App. 1997) (citing Jennings v.
Talbert, 77 S.C. 454, 456, 58 S.E. 420, 421 (1907)). A
court may admit extrinsic evidence to determine whether
a latent ambiguity exists. Id. at 353, 483 S.E.2d at 476.
Our appellate courts have also noted only latent ambiguities present questions of
fact for a jury. See Hann, 252 S.C. at 526, 167 S.E.2d at 423 ("[T]his court in a
long line of cases dealing with ambiguities in insurance policies, which were in
fact patent ambiguities, has held, either expressly or in effect, that the construction
of the particular policy was a matter for determination by the court and that no jury
issue was involved."); Cogdill v. Equity Life & Annuity Co., 262 S.C. 248, 253,
203 S.E.2d 674, 677 (1974) (explaining a patent ambiguity in an insurance policy
is to be construed by the court); Beaufort Cty. Sch. Dist. v. United Nat'l Ins. Co.,
392 S.C. 506, 526, 709 S.E.2d 85, 95-96 (Ct. App. 2011) ("Interpretation of an
unambiguous policy, or a policy with a patent ambiguity, is for the court.
Interpretation of a policy with a latent ambiguity is for the jury." (citations
omitted)).
In recent years, however, our supreme court has seemingly discarded the
distinction between patent and latent ambiguities in determining whether the
interpretation of a document is for the court or the jury. In interpreting an
insurance policy, our supreme court did not distinguish between patent and latent
ambiguities in Williams v. Government Employees Insurance Co. (GEICO), 409
S.C. 586, 594, 762 S.E.2d 705, 710 (2014), and stated the following:
"It is a question of law for the court whether the language
of a contract is ambiguous." S.C. Dep't of Natural Res. v.
Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d
299, 302-03 (2001). The construction of a clear and
unambiguous contract is a question of law for the court to
determine. Hawkins v. Greenwood Dev. Corp., 328 S.C.
585, 592, 493 S.E.2d 875, 878 (Ct. App. 1997). If the
court decides the language is ambiguous, however,
evidence may be admitted to show the intent of the
parties, and the determination of the parties' intent
becomes a question of fact for the fact-finder.
Likewise, in interpreting a deed in South Carolina Department of Natural
Resources v. Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d 299, 302-03
(2001) (internal citations omitted), our supreme court discussed ambiguities
without distinguishing between patent and latent, stating:
It is a question of law for the court whether the language
of a contract is ambiguous. Once the court decides the
language is ambiguous, evidence may be admitted to
show the intent of the parties. The determination of the
parties' intent is then a question of fact. On the other
hand, the construction of a clear and unambiguous deed
is a question of law for the court.
Following our supreme court's recent trend and its analyses in Williams and Town
of McClellanville, we find the ambiguity in the Trust presented a question of fact,
and the trial court did not err in submitting the ambiguity to the jury.
3. Judgment Notwithstanding the Verdict (JNOV)
Jerald summarily argues the trial court erred in denying his motion for JNOV. We
disagree.
"[A] motion for JNOV under Rule 50(b), SCRCP is a renewal of a directed verdict
motion." Wright v. Craft, 372 S.C. 1, 20, 640 S.E.2d 486, 496 (Ct. App. 2006).
"When reviewing the denial of a motion for directed verdict or JNOV, an appellate
court must employ the same standard as the trial court by viewing the evidence and
all reasonable inferences in the light most favorable to the nonmoving party."
Elam v. S.C. Dep't of Transp., 361 S.C. 9, 27-28, 602 S.E.2d 772, 782 (2004). "A
motion for JNOV may be granted only if no reasonable jury could have reached
the challenged verdict." Gastineau v. Murphy, 331 S.C. 565, 568, 503 S.E.2d 712,
713 (1998).
After the jury rendered its verdict, Jerald moved for JNOV "on the same grounds
as set forth" in his directed verdict motion. The court denied the motion. For the
same reasons set forth in our analysis of the directed verdict issue, we affirm.
4. Reply Brief
For the first time in his reply brief, Jerald argues only a settlor of the Trust had
authority to distribute property from the Trust. He next argues the Trust required
both settlors to be alive. Jerald maintains a trustee never had the authority to
distribute property and Edna as the remaining trustee had no authority. We decline
to address this issue because it was raised for the first time in the reply brief. See
Bochette v. Bochette, 300 S.C. 109, 112, 386 S.E.2d 475, 477 (Ct. App. 1989) ("An
appellant may not use either oral argument or the reply brief as a vehicle to argue
issues not argued in the appellant's brief."); Divine v. Robbins, 385 S.C. 23, 44 n.4,
683 S.E.2d 286, 297 n.4 (Ct. App. 2009) (declining to address an issue raised for
the first time in a reply brief).
CONCLUSION
Based on the foregoing analysis, we affirm the jury's verdict.
AFFIRMED.2
SHORT and GEATHERS, JJ., concur.
2
We decide this case without oral argument pursuant to Rule 215, SCACR.