812 S.E.2d 750
S.C. Ct. App.2018Background
- In Feb. 2010 Gecy contracted to sell land and build a house for the Hamners; Gecy referred them to South Carolina Bank & Trust (Bank) for financing. Closing was contingent on financing.
- Bank informed parties that a road maintenance agreement (RMA) signed by all Meredith Lane property owners was required for loan approval; Gecy contends that requirement was unnecessary for the Hamners’ non‑VA construction loan and thus was a misrepresentation. Bank explained the loan would convert to a VA loan after construction, and its policy required the RMA where the permanent loan would require it.
- Closing was extended to April 5, 2010; no fully signed RMA was produced by that date. The Hamners’ attorney declared the contracts void after Bank declined financing; Gecy sued Bank (tortious interference, negligent misrepresentation, unfair trade practices) and the Hamners (breach of contract); he also alleged civil conspiracy.
- Bank moved for summary judgment supported by an affidavit from a Meredith Lane owner denying she signed the RMA; summary judgment was granted for Bank and the Hamners. Gecy’s later motions to continue for additional discovery and to reconsider were denied; he appealed as to interference, breach, and negligent misrepresentation claims.
- The trial court (and the court of appeals) found Kerr v. BB&T controlled, holding Bank owed no duty to Gecy as a non‑customer third party regarding the Hamners’ loan application; the courts also found financing was a condition precedent excusing Hamners’ performance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Negligent misrepresentation against Bank | Bank falsely required an RMA and Gecy relied on that misstatement; § 552 of Restatement (2d) of Torts applies | Bank owed no duty to Gecy (a non‑customer); Kerr bars recovery by third parties regarding bank–customer financing decisions; § 552 not applicable here | Summary judgment for Bank. Kerr bars the claim; § 552 inapplicable to this banking/real‑estate financing context |
| Tortious interference with contract by Bank | Bank intentionally procured breach by refusing to fund based on a false RMA requirement | Bank legitimately set underwriting requirements and informed parties; no signed RMA existed by the deadline, so Bank’s refusal was justified | Summary judgment for Bank. No material fact showing unjustified intentional procurement of breach |
| Breach of contract against the Hamners | Hamners breached and hindered closing; their conduct (e.g., disappearing) caused failure to close | Contracts were expressly contingent on buyer obtaining financing; no financing was provided because no signed RMA was submitted; Hamners attempted to assist with RMA signatures | Summary judgment for Hamners. Financing was a condition precedent excusing performance |
| Negligent misrepresentation against the Hamners | Hamners misrepresented loan type and willingness to close, inducing Gecy | Hamners were willing and attempted to obtain RMA signatures; when financing failed, contracts allowed them to decline performance; no justifiable reliance by Gecy | Summary judgment for Hamners. No evidence of actionable false statement or justifiable reliance |
Key Cases Cited
- Kerr v. Branch Banking & Trust, 408 S.C. 328 (holding a bank owes no duty to non‑customer third parties where claims are premised on contractual obligations between bank and its customer)
- Redwend Ltd. P’ship v. Edwards, 354 S.C. 459 (elements of negligent misrepresentation require a duty to the plaintiff to communicate truthful information)
- Eldeco, Inc. v. Charleston Cty. Sch. Dist., 372 S.C. 470 (elements required to prove tortious interference with contractual relations)
- M & M Grp., Inc. v. Holmes, 379 S.C. 468 (summary judgment standard and burdens on appellate review)
- ML‑Lee Acquisition Fund, L.P. v. Deloitte & Touche, 327 S.C. 238 (South Carolina adoption of Restatement § 552 in professional accountant negligent misrepresentation context)