DocketNumber: Appellate Case No. 2016-001300; Opinion No. 27837
Citation Numbers: 818 S.E.2d 743, 424 S.C. 494
Judges: James
Filed Date: 8/29/2018
Status: Precedential
Modified Date: 10/19/2024
*745**497We granted Georgetown County's petition for a writ of certiorari to review the court of appeals' decision in Repko v. County of Georgetown ,
I.
In the early 2000s, Harmony Holdings, LLC (the Developer) began developing Harmony Township (Harmony), a residential subdivision in the County. In South Carolina, most localities will not allow a developer to sell lots in a residential development without the required infrastructure-roads, water, drainage, and sewer-being completed. The County adopted regulations addressing the completion of infrastructure in major residential subdivisions. The record on appeal contains only Article V of the Regulations (Article V). Article V, Section 3-1 (Section 3-1) provides:
**498Financial guarantees may be posted in lieu of completing improvements required by [the Regulations] to allow for the recording of a final plat or to obtain building permits for properties for which ownership will be transferred. ...
Acceptance of financial guarantees is discretionary and [the] County reserves the right to refuse a financial guarantee for any remaining improvements and require that such improvements be completed before the recording of a final plat or issuance of building permits. Acceptance of a financial guarantee by [the] County shall not be construed as an obligation to any other agency, utility or property owner within affected developments.
Therefore, in the discretion of the County, a developer could post cash, bonds, letters of credit, or other financial guarantees instead of completing the infrastructure before selling lots. When the Developer began developing Harmony Phase 2-D-1 in 2006, the County determined it would allow the requirement of a financial guarantee to be satisfied by the Developer's posting of a letter of credit (LOC) to cover the remaining cost of completion of infrastructure. An LOC is a letter issued by a bank that entitles the person named in the letter to draw up to a specified sum from the bank. The County had policies and procedures in place that governed its oversight of the completion of infrastructure and reductions in the LOC. One such policy was the requirement that the LOC be at least equal to 125% of the cost of completing *746the remaining infrastructure. If the County handled LOC procedures properly, as the Developer completed certain stages of infrastructure, the County would take steps to verify the completion of the work, and the County would notify the issuing bank that the LOC could be reduced accordingly. If handled properly, this arrangement would allow the County to draw on the LOC if the Developer failed to complete or properly complete the required infrastructure.
In 2006, the Developer submitted an LOC from Wells Fargo in the amount of $1,301,705.63-representing 125% of the projected cost of completing the infrastructure-to the County planning department for Harmony Phase 2-D-1. By April 2007, the County had approved the Developer's requests to reduce the LOC four times; after the fourth reduction, the LOC totaled $156,704.03. However, the cost of completing the **499remaining infrastructure was over one million dollars. In August 2007, the cost of unbuilt infrastructure remained over one million dollars, and the Developer informed the County it no longer had the financial means to complete any additional infrastructure. At that point, the LOC was approaching its expiration date. Shortly thereafter, the Developer declared bankruptcy. A new developer took over the project and requested the County to authorize the release of LOC funds to help complete the infrastructure; however, the County deemed this new developer to be untrustworthy and refused to allow the release of the LOC funds. The new developer withdrew from the project. Those who purchased lots in Harmony Phase 2-D-1 are unable to build on their lots because the infrastructure has not been completed.
II.
Respondent David Repko, the owner of two lots in Harmony Phase 2-D-1, commenced this action against the County alleging that the County negligently and grossly negligently failed to comply with or enforce its rules, regulations, and written policies governing its handling of the LOC. The County answered, alleging it did not owe a private duty of care to Repko and alleging that even if it did, the TCA barred Repko's claims. Specifically, the County pled it was immune from liability pursuant to subsections 15-78-60(1), (2), (4), (5), (12), and (13) of the TCA. Only subsections (4) and (12) are pertinent to this appeal. The County also alleged Repko's claims were barred by the two-year statute of limitations in section 15-78-110 of the TCA.
The case went to trial, and at the close of Repko's case, the trial court granted the County's directed verdict motion, finding (1) the Regulations did not create a private duty of care owed by the County to Repko and (2) the County was immune from liability under subsections 15-78-60(4), (5), and (13) of the TCA. The trial court ruled the County was not entitled to a directed verdict pursuant to the TCA's two-year statute of limitations. The trial court agreed with Repko's argument that subsection 15-78-60(12) did not apply to this case and ruled the County was not entitled to immunity under subsection (12). The court of appeals reversed the directed verdict and remanded **500for a new trial. Repko v. Cty. of Georgetown ,
We address only the court of appeals' holding that the trial court erred in granting a directed verdict under subsection 15-78-60(4) of the TCA. As our holding on this point is dispositive of the appeal, we need not address the remaining issues. See Futch v. McAllister Towing of Georgetown, Inc. ,
III.
An appellate court will reverse the trial court's ruling on a directed verdict motion only when there is no evidence to support the ruling or when the ruling is controlled by an error of law. Law v. S.C. Dep't of Corr. ,
*747McMillan v. Oconee Mem'l Hosp., Inc. ,
In a negligence action, "[t]he court must determine, as a matter of law, whether the law recognizes a particular duty." Steinke v. S.C. Dep't of Labor, Licensing & Regulation ,
Repko's action against the County is based upon his contention that the County was grossly negligent in allowing the Developer's LOC to be reduced from the original $1,301,705.63 to $156,704.03 without first ascertaining that the LOC continued to cover 125% of the cost of remaining infrastructure.
**501The essence of Repko's claim is that the County was grossly negligent in failing to comply with or enforce its rules, regulations, and policies governing its handling of the LOC. The County maintains that even if it were grossly negligent, it is immune from liability to Repko pursuant to subsection 15-78-60(4) of the TCA. We agree with the County.
In response to our abolition of the doctrine of sovereign immunity in McCall v. Batson ,
In its answer to Repko's complaint, the County pled several of the exceptions to the waiver of immunity found in section 15-78-60, namely those in subsections (1), (2), (4), (5), (12), and (13). Of these six, subsection (4) is the centerpiece of the County's claim of immunity. Subsection 15-78-60(4) provides:
[A] governmental entity is not liable for a loss resulting from[ ] adoption, enforcement , or compliance with any law or failure to adopt or enforce any law , whether valid or invalid, including, but not limited to, any charter, provision, ordinance , resolution, rule, regulation , or written policies [.]
(emphasis added).
The County also pled it was entitled to immunity pursuant to subsection 15-78-60(12), which provides:
**502[A] governmental entity is not liable for a loss resulting from[ ] licensing powers or functions including, but not limited to, the issuance, denial, suspension, renewal, or revocation of or failure or refusal to issue, deny, suspend, renew, or revoke any permit, license, certificate, approval, registration, order, or similar authority except when the power or function is exercised in a grossly negligent manner [.]
(emphasis added).
After Repko rested at trial, the County moved for a directed verdict under subsections *748(4), (5), (12), and (13). Again, only subsections (4) and (12) are at issue in this appeal. During argument of the directed verdict motion, Repko argued subsection (12) did not apply to this case because the County's actions did not involve a licensing power or function. Specifically, Repko argued to the trial court that the duty owed to him by the County "doesn't have anything to do with the licensing function." The trial court agreed and stated in its ruling from the bench, "I don't think [subsection (12) ] is applicable, the licensing function." In its written order, the trial court did not grant a directed verdict to the County pursuant to subsection (12) but granted a directed verdict to the County pursuant to subsections (4), (5), and (13).
Repko moved for reconsideration and argued, among other things, that because the County simply pled it was entitled to immunity under subsection (12), the gross negligence standard contained in subsection (12) must be read into the immunity provisions contained in subsections (4), (5), and (13). Repko had never presented this argument prior to the motion for reconsideration. The trial court summarily denied Repko's motion in a form order. It is settled that "[a]n issue may not be raised for the first time in a motion to reconsider." Johnson v. Sonoco Prods. Co. ,
As we discuss in section A immediately below, Repko never argued to the trial court or even to the court of appeals that the immunity provision in subsection 15-78-60(12) applied to the facts of this case. However, the court of appeals sua **503sponte raised and ruled upon the issue. In so doing, the court of appeals did not squarely address the issue of whether the gross negligence exception contained in subsection (12) must be read into the immunity provision contained in subsection (4). Again, we address the merits of this argument in section B below.
A.
We first conclude the court of appeals erred in sua sponte raising and ruling upon an issue that Repko never advanced to the trial court. As noted, Repko successfully argued at the directed verdict stage that the duty owed to him by the County "doesn't have anything to do with the [County's] licensing function." At no time before the trial court or in his brief to the court of appeals did Repko argue that his loss resulted from the County's exercise of its licensing powers or functions, as contemplated by subsection (12).
Subsection 15-78-60(12) grants immunity for losses resulting from the "renewal" of a permit. The County approved reductions of the letter of credit and, in doing so, allowed the renewal of the permit to sell lots even though the letter of credit had been improperly reduced. Based on this evidence, a jury could have found subsection 15-78-60(12) applied.
Repko ,
This was error. An appellate court may not reverse a lower court order based on a legal or factual premise not advanced by the party who lost at the trial court level. In I'On, L.L.C. v. Town of Mt. Pleasant , we noted "the long-established preservation requirement that the losing party generally must both present his issues and arguments to the lower court and obtain a ruling before an appellate court will review those issues and arguments."
B.
Because it concluded that "a jury could have found subsection 15-78-60(12) applied," the court of appeals did not address the issue Repko presents to this Court-whether the gross negligence standard contained in subsection (12) must be read into subsection (4) simply because the County initially pled it was entitled to immunity under subsection (12). Repko has advanced no theory of liability other than the County's grossly negligent failure to comply with or enforce its rules, regulations, and policies governing the handling of the LOC. This claim runs headlong into the County's central defense under subsection (4) that it is immune from liability for such a failure.
Repko's very able appellate counsel rightly conceded at oral argument that because subsection (4) does not contain a gross negligence standard, standing alone, subsection (4) would entitle the County to immunity from liability from its failure to comply with or enforce the Regulations. However, Repko claims our case law requires the gross negligence standard contained in subsection (12) to be read into subsection (4) simply because the County initially pled it was entitled to immunity under subsection (12). We disagree.
This Court and the court of appeals have held that when an applicable exception to the waiver of immunity contains a gross negligence standard, that gross negligence standard must be read into all other applicable exceptions that do not contain a gross negligence standard. Consequently, the immunity provision containing the gross negligence standard must actually apply to the case before it can be read into another immunity provision. In Steinke , we held:
**505In sum, we recognize the trial court often faces Tort Claims Act cases in which at least one of the asserted exceptions contains the gross negligence standard while other asserted exceptions do not. We hold that when an exception containing the gross negligence standard applies, that same standard will be read into any other applicable exception.
In Plyler v. Burns , a conservatorship beneficiary sued the Horry County probate court, claiming the probate court mishandled the administration of the conservatorship.
Repko argues Jones v. Lott ,
Repko also argues Proctor v. Department of Health & Environmental Control ,
Plyler and Steinke clearly dictate that in order for the gross negligence standard from one immunity provision to be read into an immunity provision that does not contain a gross negligence standard, the immunity provision containing the gross negligence standard must first apply to the case. We disavow any suggestion to the contrary in Jones . In many instances, a governmental entity may initially plead entitlement to immunity pursuant to a subsection containing a gross negligence standard. In many of those instances, that particular immunity may ultimately not apply to the facts of the case. In such a case, the gross negligence standard contained in that immunity is not to be read into applicable immunity subsections that do not contain a gross negligence standard. We reaffirm our holding in Steinke "that when an exception containing the gross negligence standard applies, that same standard will be read into any other applicable exception."
Here, at the directed verdict stage, Repko argued-correctly we must add-that subsection *75115-78-60(12) did not apply to this case. The trial court agreed and so ruled. Repko is left only with the argument that the gross negligence standard in subsection (12) should be read into subsection 15-78-60(4) simply because the County originally pled subsection (12) as a defense. This argument fails as a matter of law; standing alone, subsection (4) provides immunity to the County. Therefore, we find the trial court correctly directed a verdict for the County pursuant to subsection 15-78-60(4).
IV.
The trial court properly granted a directed verdict to the County on the ground that the County is immune from **508liability pursuant to subsection 15-78-60(4) of the TCA. We therefore REVERSE the court of appeals and reinstate the directed verdict. We vacate the opinion of the court of appeals.
BEATTY, C.J., KITTREDGE, J., and Acting Justice Gordon G. Cooper, concur. HEARN, J., concurring in result only in a separate opinion.
JUSTICE HEARN :
I concur in the result reached by the majority but write separately, as I believe the first question we must address is whether the County owed a private duty to Repko. Arthurs ex rel. Estate of Munn v. Aiken Cty. ,
As the majority discussed, the County promulgated regulations concerning the completion of infrastructure in certain residential communities. Section 3.1 of the ordinance expressly states, "Acceptance of a financial guarantee by Georgetown County shall not be construed as an obligation to any other agency, utility or property owner within the affected developments."
In viewing this provision, it is important to note that this Court has recognized that the public duty rule and the South Carolina Tort Claims Act are not incompatible. Arthurs ,
**509Steinke v. S.C. Dep't of Labor, Licensing & Regulation ,
However, an exception to the public duty rule applies where the statute demonstrates the drafter's intent to impose a duty upon public officials for the benefit of a specified class of persons. To ascertain legislative intent, this Court has applied the six-factor "special duty test" adopted in Jensen v. Anderson County Dep't of Social Services ,
*752in other words, the focus of the inquiry is to determine when the legislature intended to create a special duty owed to a particular class of persons.
As the majority described, the County passed an ordinance regulating the planning and development of subdivisions whereby a developer could not sell a lot until the infrastructure was completed-including storm water management, grading of the roads, and utilities. However, section 3.1 afforded the County discretionary authority to accept a developer's financial guarantee in lieu of compliance with the required infrastructure, thereby permitting the developer to sell lots **510while infrastructure work continued. Section 3.1's text expressly provides the County's discretionary authority "shall not be construed as an obligation to any other agency, utility or property owner..." Because that language clearly evinces the County's intent not to create a duty to property owners, an analysis under the special duty test in Jensen provides minimal, if any, additional guidance in ascertaining the County's intent. While that test is designed to ascertain when the legislature has been "sufficiently specific" to permit an aggrieved party to seek a remedy against a public official, here, the County has been more than "sufficiently specific" that it owes no duty to the property owners.
The court of appeals viewed section 3.1 as a disclaimer preempted by the South Carolina Tort Claims Act. Repko v. Cty. of Georgetown ,
Furthermore, this Court's decision in Brady Development Co., Inc. v. Town of Hilton Head Island ,
Brady filed a lawsuit against the Town of Hilton Head Island, alleging it negligently administered the development ordinance.
Significantly, the Court in Brady rejected imposing a private duty into an ordinance that was silent on whether such a duty was created. The Court did look to the ordinance to determine the first element of the test-the essential purpose of the statute, as the ordinance stated, "The purpose of this chapter is to promote the public health, safety and general welfare ... and to facilitate the timely and adequate provision of transportation, water, sewage disposal, schools, parks and other requirements."
The facts here are even more compelling than in Brady because the ordinance clearly demonstrates the County's intent not to confer a private duty. Finding that a duty existed here would require overruling Brady .
Though not dispositive of this issue, we are compelled to note that Repko advanced to the trial court the opposite of the argument the court of appeals sua sponte raised and ruled upon.
As set forth in Jensen , the special duty test encompasses:
(1) an essential purpose of the statute is to protect against a particular kind of harm;
(2) the statute, either directly or indirectly, imposes on a specific public officer a duty to guard against or not cause that harm;
(3) the class of persons the statute intends to protect is identifiable before the fact;
(4) the plaintiff is a person within the protected class;
(5) the public officer knows or has reason to know the likelihood of harm to members of the class if he fails to do his duty; and
(6) the officer is given sufficient authority to act in the circumstances or he undertakes to act in the exercise of his office.
Jensen ,
Even an analysis under the special duty test reaches the same result because Repko fails to satisfy the third element-the class of persons the statute intends to protect is identifiable before the fact. Section 3.1 specifically noted, "Acceptance of a financial guarantee by [the County] shall not be construed as an obligation to any ... property owner within the affected development ." Therefore, it would be illogical to consider Repko, as a property owner, as part of a class the County intended to protect when the ordinance expressly provides otherwise.