The Muhler Company, Inc. v. State Farm Fire & Casualty Co.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 20-1800
THE MUHLER COMPANY, INC., individually and as assignee of Window World
of North Charleston, LLC,
Plaintiff - Appellant,
v.
STATE FARM FIRE & CASUALTY CO.,
Defendant - Appellee.
Appeal from the United States District Court for the District of South Carolina, at
Charleston. David C. Norton, District Judge. (2:17-cv-01200-DCN)
Submitted: January 20, 2022 Decided: February 3, 2022
Before AGEE, QUATTLEBAUM, and RUSHING, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ON BRIEF: Jaan G. Rannik, EPTING & RANNICK, LLC, Charleston, South Carolina,
for Appellant. M. Kathleen McTighe Mellen, Charles R. Norris, NELSON MULLINS
RILEY & SCARBOROUGH LLP, Charleston, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
The Muhler Company, Inc. (“Muhler”) appeals the district court’s order granting
summary judgment in favor of State Farm Fire & Casualty Co. (“State Farm”) in Muhler’s
suit against it, which sought declaratory judgment and damages arising from a separate suit
that Muhler successfully pursued against State Farm’s former insured, Window World of
North Charleston, LLC (“WWNC”). Muhler also appeals the district court’s order denying
its motion for reconsideration, which the district court construed as a motion pursuant to
Fed. R. Civ. P. 59(e). On appeal, Muhler argues that the district court erred in granting
summary judgment on its claims brought as assignee on the ground that the assignment on
which Muhler sought to rely, a 2016 judicial assignment to Muhler of any claims WWNC
may have against State Farm, was invalid in light of WWNC’s termination four years
earlier. Muhler also challenges the district court’s conclusion on reconsideration that
Muhler waived review of its claims brought as WWNC’s judgment creditor. Finding no
reversible error, we affirm.
We review a grant of summary judgment de novo, “viewing the facts and drawing
all reasonable inferences in the light most favorable to the nonmovant.” Salley v. Myers,
971 F.3d 308, 312 (4th Cir. 2020). “[S]ummary judgment is appropriate if the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fusaro v. Howard, 19 F.4th 357, 366 (4th Cir. 2021)
(internal quotation marks omitted).
The parties do not fairly dispute that WWNC filed both articles of dissolution and
articles of termination with the South Carolina Secretary of State during the pendency of
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Muhler’s suit against WWNC. * Upon dissolution, an LLC is required to wind up its
business, which may include the dissolved LLC’s participation in litigation. See S.C. Code
Ann. §§ 33-44-802(a), 33-44-803(c). As the district court concluded, however, WWNC’s
legal existence ended upon the filing of its articles of termination. See S.C. Code Ann.
§ 33-44-805(b). Once terminated, WWNC lacked the capacity to prosecute or defend
lawsuits. See, e.g., In re Midpoint Dev., LLC, 466 F.3d 1201, 1204-07 (10th Cir. 2006)
(addressing effect of analogous Oklahoma law); Chadwick Farms Owners Ass’n v FHC
LLC, 207 P.3d 1251,1256-62 (Wash. 2009) (addressing effect of analogous Washington
law); Metro Commc’n Corp. BVI v. Advanced Mobilecomm Techs. Inc., 854 A.2d 121, 138
(Del Ch. 2004) (addressing effect of analogous Delaware law). Thus, at the time of the
judicial assignment, WWNC—a defunct entity—had no legal claims against State Farm to
be assigned to Muhler.
Muhler faults the district court for declining to declare WWNC’s articles of
termination invalid, arguing that WWNC could not have wound up its business during
dissolution while Muhler’s lawsuit remained pending against it. While Muhler observes
that dissolved LLCs retain the capacity to sue and be sued, see S.C. Code Ann. §§ 33-14-
105(c)(5), 33-44-803(c), those provisions do not apply to terminated LLCs or otherwise
*
Insofar as Muhler relies on a printout from the website of the South Carolina
Secretary of State to argue that WWNC’s legal status is merely “dissolved,” we conclude
that this evidence is insufficient to create a genuine dispute of material fact in light of the
other undisputed evidence of record. See Haze v. Harrison, 961 F.3d 654, 658 (4th Cir.
2020) (“A dispute is genuine if a reasonable jury could return a verdict for the nonmoving
party, and a fact is material if it might affect the outcome of the suit under governing law.”
(alterations and internal quotation marks omitted)).
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alter the plain language of § 33-44-805(b). See Hately v. Watts, 917 F.3d 770, 784 (4th
Cir. 2019) (explaining that statutory interpretation “begin[s] with the plain language” of
statute, and “[i]f the plain language is unambiguous, we need look no further” (internal
quotation marks omitted)); CFRE, LLC v. Greenville Cnty. Assessor, 716 S.E.2d 877, 881
(S.C. 2011) (requiring courts to give statutory language its “plain and ordinary meaning”
and “apply [its] literal meaning” if unambiguous (internal quotation marks omitted)). As
the district court explained, the language of § 33-44-803(c) is permissive, lending little
independent support to Muhler’s conclusion that the pending litigation against WWNC
altered the legal effect of the articles of termination. Moreover, even if we were to agree
that WWNC failed to properly wind up its affairs prior to termination, Muhler identifies
no mechanism for challenging the legal effect of an LLC’s articles of termination,
including on grounds of improper winding up. We decline to recognize such a remedy
absent evidence that the South Carolina legislature intended to authorize it. See California
v. Sierra Club, 451 U.S. 287, 297 (1981) (“The federal judiciary will not engraft a remedy
on a statute, no matter how salutary, that [the legislature] did not intend to provide.”); see
also CFRE, 716 S.E.2d at 881 (“The cardinal rule of statutory interpretation is to ascertain
and effectuate the intent of the legislature.” (internal quotation marks omitted)).
Muhler resorts to the policy implications of the district court’s holding but has
largely waived these arguments on appeal. See Zoroastrian Ctr. & Darb-E-Mehr of Metro.
Wash., D.C. v. Rustam Guiv Found. of N.Y., 822 F.3d 739, 753-54 (4th Cir. 2016)
(explaining that issues first raised on appeal generally are waived absent exceptional
circumstances); Grayson O Co. v. Agadir Int’l LLC, 856 F.3d 307, 316 (4th Cir. 2017)
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(explaining that party waives argument by failing to develop it in opening brief, even if
brief takes “a passing shot at the issue” (internal quotation marks omitted)). In any event,
such policy considerations cannot alter the plain meaning and effect of the relevant
statutory scheme. Likewise, Muhler has forfeited appellate review of its arguments that
State Farm waived its challenge to the validity of the assignment. See JTH Tax, Inc. v.
Aime, 984 F.3d 284, 290 (4th Cir. 2021) (observing that Rule 59(e) motions cannot be used
“to raise arguments which could have been raised prior to the issuance of the judgment”);
Zoroastrian Ctr., 822 F.3d at 753-54. We therefore find no reversible error in the district
court’s grant of summary judgment as to Muhler’s claims as assignee.
Turning to Muhler’s claims as judgment creditor, we review the denial of a Rule
59(e) motion for abuse of discretion. Drummond Coal Sales, Inc. v. Norfolk S. Rwy. Co.,
3 F.4th 605, 614 (4th Cir. 2021); see also Sierra Club v. U.S. Dep’t of Interior, 899 F.3d
260, 286 (4th Cir. 2018) (“[P]arties cannot waive the proper standard of review by failing
to argue it.” (internal quotation marks omitted)). “A district court abuses its discretion if
it relies on an error of law or a clearly erroneous factual finding.” SAS Inst., Inc. v. World
Programming Ltd., 952 F.3d 513, 523 (4th Cir. 2020) (internal quotation marks omitted),
cert. denied, 141 S. Ct. 1053 (2021).
Our review of the record reveals no reversible error in the district court’s conclusion
that Muhler forfeited its claims as judgment creditor by failing to adequately respond to
State Farm’s summary judgment arguments related to those claims. See Cox v. SNAP, Inc.,
859 F.3d 304, 308 n.2 (4th Cir. 2017). Although we have emphasized “the sound public
policy of deciding cases on their merits,” Choice Hotels Int’l, Inc. v. Goodwin & Boone,
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11 F.3d 469, 471 (4th Cir. 1993) (internal quotation marks omitted), we conclude that such
policy considerations do not undermine the application of the waiver rules here. See Exxon
Shipping Co. v. Baker, 554 U.S. 471, 487 n.6 (2008) (“[L]itigation is a winnowing process,
and the procedures for preserving or waiving issues are part of the machinery by which the
courts narrow what remains to be decided.”).
Accordingly, we affirm the district court’s judgment. We dispense with oral
argument because the facts and legal contentions are adequately presented in the materials
before this court and argument would not aid the decisional process.
AFFIRMED
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