Ronald L. Jones v. Rogers Townsend & Thomas, P.C. ( 2022 )

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Ronald L. Jones and Gayle Langley Jones, Thomas
Huguenin Gaillard, as Trustee of The Thomas Huguenin
Gaillard Revocable Trust, Dated April 3, 2007, and
Thomas W. Cone, Jr. as Trustee of The Thomas W.
Cone, Jr. Revocable Trust, Dated April 3, 2007,
Respondents,
v.
Rogers Townsend & Thomas, P.C.; Lisa Hostetler;
Alexander C. Peabody; and Peabody & Associates, Inc.,
Defendants,
Of Which Rogers Townsend & Thomas, P.C. and Lisa
Hostetler are Appellants.
Appellate Case No. 2019-001140
Appeal From Berkeley County
Deadra L. Jefferson, Circuit Court Judge
Unpublished Opinion No. 2022-UP-314
Heard May 3, 2022 – Filed July 27, 2022
AFFIRMED
Warren C. Powell, Jr., and Chelsea Jaqueline Clark, both
of Bruner Powell Wall & Mullins, LLC, of Columbia, for
Appellants.
J. Jay Hulst, of Williams & Hulst, LLC, of Moncks
Corner, and Robert Wade Maring, of Maring & Moyer,
LLC, of Georgetown, both for Respondents.
PER CURIAM: This legal malpractice case arises out of a real estate closing. The
Joneses were the purchasers. Rogers Townsend & Thomas, P.C. (the law firm)
closed the sale.
The Joneses sued the law firm after they discovered an alleged easement on their
property in favor of the Joneses' neighbors, the Trustees. The law firm convinced
the circuit court to add the Trustees to the suit as necessary parties, but the circuit
court later dismissed them. That dismissal is the subject of this appeal.
The court dismissed the Trustees because the Trustees and the Joneses entered a new
easement agreement after the Trustees were added to the suit. This new agreement
extinguished the old easement, though (of course) the old easement remained a ripe
dispute between the Joneses and the law firm in the malpractice case.
We affirm because we agree with the circuit court's reasoning: the Trustees have no
interest in the old easement and thus, no interest in this suit.
FACTS
The Joneses purchased the property in 2010. They hired the law firm to do the
closing. The law firm allegedly failed to discover and disclose an easement granting
the Trustees an easement over the property.
The Joneses sued the law firm for malpractice. The law firm asserted the easement
either never existed, was no longer enforceable, or was waived, and that if any of
those things were true, the Joneses could not prove damages.
The law firm moved to join the Trustees to the suit and argued the Trustees were
necessary parties. Judge Buckner granted the motion.
Not long after that, the Trustees and the Joneses entered into an agreement
terminating the original easement and establishing a new one over a narrower portion
of land. Then, the Trustees moved to be released from the suit, claiming they no
longer had any interest in the case. The law firm moved to amend its answer to
include a request for a declaratory judgment.
After back-to-back hearings, Judge Jefferson granted both motions. The law firm
appeals the decision dropping the Trustees from the case.
ISSUE
Did the circuit court err in dismissing the Trustees from this case?
STANDARD OF REVIEW
The parties disagree on the standard of review. The Trustees and the Joneses argue
we should review for abuse of discretion. The law firm argues we should view the
facts in its favor and reverse if it is entitled to relief under any theory. See Grimsley
v. S.C. L. Enf't Div., 396 S.C. 276, 281, 721 S.E.2d 423, 426 (2012) (stating the
standard of review for cases dismissed pursuant to Rule 12(b)(6), SCRCP).
Our precedent provides "[a] motion to dismiss a party is addressed to the court's
discretion." Demian v. S.C. Health & Hum. Servs. Fin. Comm'n, 297 S.C. 1, 5, 374
S.E.2d 510, 512 (Ct. App. 1988) (citing 3A James Wm. Moore et al., Moore's
Federal Practice § 21.03[1] (2d ed. 1987)) (reviewing a decision not to dismiss a
party for abuse of discretion). Also, federal courts uniformly cite the abuse of
discretion standard in situations involving joinder. See, e.g., DirecTV, Inc. v. Leto,
467 F.3d 842, 844 (3d Cir. 2006) (explaining district judges have discretion to sever
claims or dismiss them without prejudice to remedy misjoinder); Letherer v. Alger
Grp., L.L.C., 328 F.3d 262, 266-68 (6th Cir. 2003) (affirming the decision to drop a
misjoined party because there was no abuse of discretion), overruled on other
grounds by Blackburn v. Oaktree Cap. Mgmt., LLC, 511 F.3d 633 (6th Cir. 2008).
If forced to choose, we would follow the cases cited above and treat this as a joinder
issue entrusted to the circuit court's discretion, but we find we do not need to choose.
We do not see any disputed facts or inferences to draw in anyone's favor. Indeed,
our conclusions would be the same if we viewed the record and gave the law firm
the benefit of any factual disagreements.
APPEALABILITY
The Trustees and the Joneses argue that the circuit court's order is not immediately
appealable and that we can avoid addressing the merits. Orders denying joinder are
generally not immediately appealable. See Marshall v. Winter, 250 S.C. 308, 312,
157 S.E.2d 595, 596-97 (1967) (finding an order denying a motion to bring in
additional parties was unappealable prior to final judgment); Crussiah v. Inova
Health Sys., 688 F.App'x 218, 218 (4th Cir. 2017) (finding an order denying a motion
for joinder was neither a final nor an appealable interlocutory order). Here, however,
the circuit court did not deny joinder. Instead, the circuit court dismissed the
Trustees from the case after it had previously joined them. This was a dispositive
decision as to the Trustees—it dismissed them from the case—and the grant of a
dispositive motion is immediately appealable. See Link v. Sch. Dist. of Pickens
Cnty., 302 S.C. 1, 3-6, 393 S.E.2d 176, 177-79 (1990) (explaining an order
dismissing one of multiple claims is immediately appealable); Murphy v.
Owens-Corning Fiberglas Corp., 346 S.C. 37, 44-45, 550 S.E.2d 589, 593 (Ct. App.
2001) (explaining an order dismissing one of multiple defendants is immediately
appealable), overruled on other grounds by Farmer v. Monsanto Corp., 353 S.C.
553, 579 S.E.2d 325 (2003).
DISMISSAL, MISJOINDER, AND NONJOINDER
To this point, we have said the circuit court "dismissed" the Trustees. The Trustees
captioned their motion as seeking "nonjoinder," but, as the briefing recognizes,
misjoinder (rather than nonjoinder) is the vehicle for dropping parties who have
previously been added. The law firm argues the Trustees are necessary parties under
Rule 19, SCRCP, because it is not possible to afford complete relief or avoid
duplicative litigation without them. It further argues the circuit court's dismissal of
the Trustees pursuant to Rule 21, SCRCP (titled "Misjoinder and Nonjoinder of
Parties"), was not proper. The Trustees and the Joneses argue the Trustees are not
necessary parties under Rule 19 and that dismissal under Rule 21 was proper.
I. Rule 19
Removing a necessary party is generally improper. See 4 James Wm. Moore et al.,
Moore's Federal Practice § 21.05 (3d ed.) ("[T]he court may only dismiss a party or
drop a claim against a dispensable party." (emphasis in original)). A party is
necessary if:
(1) in his absence complete relief cannot be accorded
among those already parties, or (2) he claims an interest
relating to the subject of the action and is so situated that
the disposition of the action in his absence may (i) as a
practical matter impair or impede his ability to protect that
interest or (ii) leave any of the persons already parties
subject to a substantial risk of incurring double, multiple,
or otherwise inconsistent obligations by reason of his
claimed interest.
Rule 19(a), SCRCP.
The Trustees do not meet Rule 19's criteria. Their rights against the Joneses are
settled by the new easement, not the old one. This situation is not meaningfully
different from Hardwick v. Liberty Mutual Insurance Company, which was a dispute
between the driver of a rental car involved in an accident and the rental company's
insurer. 243 S.C. 162, 133 S.E.2d 71 (1963). Our supreme court explained the
driver's personal automobile insurer was not a necessary party because nothing
indicated the court needed to ascertain the rights under that policy before the court
could determine the rights between the driver and the rental insurer. Id. at 169-70,
133 S.E.2d at 74 ("[I]t is well established that parties are not necessary to a complete
determination of a controversy unless they have rights which must be ascertained
and settled before rights of parties to the suit can be determined." (quoting Doctor v.
Robert Lee, Inc., 215 S.C. 332, 335, 55 S.E.2d 68, 69 (1949))). So too here—the
Trustees' rights against the Joneses are settled by the new easement, not the old one.
We are convinced the circuit court does not need to ascertain the Trustees' rights
before it can determine the dispute about the old easement between the Joneses and
the law firm. See Altom Transport, Inc. v. Westchester Fire Ins. Co., 823 F.3d 416,
420-21 (7th Cir. 2016) (dismissing an entity that had no legal interest in the suit and
no claims against any party).
We have not been able to identify any interest the Trustees could have in this suit.
The Trustees have no claim against the law firm for legal malpractice. The Trustees
also have no interest in the original easement. We do not see any practical problems
created by dropping the Trustees, nor do we see a risk of inconsistent judgments.
The Joneses may win or lose their malpractice case, and we see no way either
outcome affects the new easement between the Joneses and the Trustees. Therefore,
the Trustees are not necessary parties.
II. Rules 20 and 21
Our misjoinder rule states that a dispensable party "may be dropped or added by
order of the court on motion of any party or of its own initiative at any stage of the
action and on such terms as are just." Rule 21, SCRCP. This court has found
misjoinder is proper when the party "fail[s] to satisfy either of the preconditions for
permissive joinder of parties set forth in Rule 20(a)." Farmer v. CAGC Ins. Co., 424
S.C. 579, 585, 819 S.E.2d 142, 145 (Ct. App. 2018) (quoting 7 Wright & Miller,
Federal Practice and Procedure § 1683 (3d ed.)). Under Rule 20(a), SCRCP, a
party may join or be joined if he asserts or there is asserted against him "any right to
relief jointly, severally, or in the alternative in respect of or arising out of the same
transaction, occurrence, or series of transactions or occurrences and if any question
of law or fact common to all these persons will arise in the action."
The plain language of Rule 21 gives the circuit court broad authority to drop a party
"at any stage of the action and on such terms as are just." Rule 21, SCRCP. We do
not see anything unjust about the circuit court's decision to drop the Trustees. When
the Trustees were joined to the case, their rights as to the Joneses were settled by the
same easement at the center of the Joneses' malpractice claim. That easement no
longer exists. The Trustees do not want to be in the case, they have no claim against
the other parties, and as far as we can see, dropping the Trustees does not prevent or
impair the law firm from asserting any of its claims about the original easement's
validity. We see no error on the circuit court's part. See 4 James Wm. Moore et al.,
Moore's Federal Practice § 21.03 (3d ed.) (noting dismissal of a party must be on
terms that are just and would be error if it prejudiced a party's substantial rights).
Even if we go beyond the rule's plain language and consider whether the Trustees
satisfy the preconditions of permissive joinder, we reach the same conclusion. The
Trustees do not assert any right to relief against the law firm, and the law firm does
not have any conceivable claim against the Trustees. As we read the filings, the law
firm seeks a declaratory judgment on the validity of the original easement, but the
Trustees no longer claim any interest in that easement. Accordingly, we agree with
the circuit court that dismissal for misjoinder was proper.
DECLARATORY JUDGMENT
The law firm argues the rulings are inconsistent. In its motion to amend, the law
firm sought to add a declaratory judgment not just against the Joneses, but against
the Trustees as well. The law firm suggests that dropping the Trustees ran afoul of
the declaratory judgment statute because the firm seeks a ruling on the new
easement's validity as well as the old one. See S.C. Code Ann. § 15-53-80 (2005)
("When declaratory relief is sought all persons shall be made parties who have or
claim any interest which would be affected by the declaration, and no declaration
shall prejudice the rights of persons not parties to the proceeding.").
We do not see how the law firm could have standing to challenge the new easement,
which (by all accounts) was a voluntary agreement between the Trustees and the
Joneses. We do not see how the new easement affects the law firm or its defense
that the original easement was not valid. See Bailey v. Bailey, 312 S.C. 454, 458,
441 S.E.2d 325, 327 (1994) (explaining standing requires a personal stake in the
controversy).
There is undoubtedly a cause-and-effect relationship between the two agreements.
If the original easement turns out to be invalid or waived, that may show the Joneses'
decision to participate in the new easement was unwise or imprudent. Either way,
it seems apparent that the Trustees will not be affected by a declaratory judgment on
the original easement's validity.
Finally, the record makes clear that the circuit court dismissed the Trustees from the
case before granting the law firm's motion to amend. We cannot sensibly construe
the circuit court's twin rulings as releasing the Trustees only to add them right back.
REMAINING ISSUES
The law firm's four additional arguments do not alter our opinion. We address them
briefly below.
First, when the parties were before the circuit court, the Trustees and the Joneses
argued the law firm did not have standing to challenge the original easement's
validity. The law firm argues the circuit court should have affirmatively ruled it has
standing. The law firm clearly has standing to make all arguments necessary to its
defense. The circuit court stated standing was "for another day," and we are
confident the court will handle disputes about standing if any such disputes remain
when the case is tried.
Second, the law firm argues Judge Buckner's order joining the Trustees was the law
of the case and that Judge Jefferson did not have the authority to drop them. We
disagree. The new easement agreement between the Trustees and the Joneses did
not exist at the time Judge Buckner joined the Trustees. See Nelson v. Charleston
& W. C. Ry. Co., 231 S.C. 351, 357, 98 S.E.2d 798, 800 (1957) (explaining the law
of the case doctrine is inapplicable when the evidence has materially changed).
Next, the law firm argues the circuit court relied solely on arguments of counsel
rather than actual evidence in reaching its decision that the Trustees and the Joneses
had entered a new agreement. We disagree. The circuit court had a copy of the new
easement between the Trustees and the Joneses. Indeed, the law firm attached a
copy of the new easement agreement to its motion to amend its answer.
Last, the law firm argues the circuit court said during one of the hearings that the
Trustees had "to come over the property somehow[, s]o they needed to resolve it."
The law firm asserts this essentially amounted to a ruling there was an easement by
necessity. Again, we disagree. While we do not know what to make of this
particular comment, there is no language in any of the circuit court's orders
suggesting the circuit court decided anything more than the discrete issues the
then-pending motions presented.
CONCLUSION
For these reasons, the circuit court's order dropping the Trustees from the case is
AFFIRMED.
THOMAS, MCDONALD, and HEWITT, JJ., concur.