Oskin v. Johnson
400 S.C. 390
| S.C. | 2012Background
- Oskin sued Johnson for $1,000,000 finder’s fee after a 2005 sale brokered by Oskin; Johnson was judgment debtor in 2008 for breach of contract.
- Johnson and M. Brown co-signed a $3.5 million two-year note in 2006 to buy Myrtle Beach property, with title held as tenants in common and a SCB & T first mortgage plus a $500,000 Ameris Bank second mortgage.
- As balloon payment approached in 2008, refinance was sought; Wachovia required securities worth $3.5 million due to low appraisals, which failed.
- On November 20, 2008, Joan Conner Brown formed J. Conner, LLC to acquisition-note and mortgage from SCB & T; Wachovia loan funded $3.5 million to J. Conner in December 2008.
- SCB & T assigned the note and mortgage to J. Conner on December 30, 2008, giving J. Conner priority as lien creditor; Bills and judgments against Johnson remained subordinate.
- The Master held the Statute of Elizabeth did not apply for fraudulent conveyance, and that the payment did not satisfy the note or mortgage; Appellants appealed, and the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the assignment violated the Statute of Elizabeth | Appellants claim fraudulent conveyance | SCB & T intended no fraud; grantor’s actions not fraudulent | No clear and convincing fraud; statute not satisfied by assignment. |
| Whether the $3.5 million payment to SCB & T paid off the note and mortgage | J. Conner’s payment should satisfy as alter-ego of Brown | No alter-ego; future advances clause not controlling; payment not a payoff | Mortgage not satisfied; no payoff due to lack of alter-ego and open issues. |
Key Cases Cited
- Windsor Props., Inc. v. Dolphin Head Constr. Co., 331 S.C. 466 (1998) (clear and convincing standard for fraudulent conveyance under Statute of Elizabeth)
- Future Group, II v. Nationsbank, 324 S.C. 89 (1996) (equitability and preponderance of the evidence noted in footnote; later clarified)
- McDaniel v. Allen, 265 S.C. 237 (1975) (transfer without valuable consideration or intent to defraud)
- Lebovitz v. Mudd, 293 S.C. 49 (1987) (statute applies to creditors and others; not limited to debtor-creditor)
- Central Production Credit Ass’n v. Page, 268 S.C. 1 (1977) (open-ended mortgage future advances clause; its effect on satisfaction)
- Matthews v. Montgomery, 193 S.C. 118 (1940) (fraud elements; illegality of conveyance notwithstanding)
- Baker v. Equitable Leasing Corp., 275 S.C. 359 (1980) (veil-piercing requires fraud or injustice)