815 S.E.2d 431
S.C.2018Background
- Overland, Inc. (Land Rover Greenville) sued Lara Nance and several banks after Nance embezzled $1,282,000 from Overland and pled guilty to wire fraud in federal court.
- Overland's theory: Bank of America and SunTrust breached duties by allowing Nance to deposit forged checks into accounts she created, enabling the theft.
- Banks moved for summary judgment arguing they owed no duty to Overland because Overland was not a customer and was not an intended third-party beneficiary of any bank-customer relationship.
- The circuit court granted summary judgment for the banks and denied Overland's Rule 59(e) motion; the court of appeals dismissed Overland's appeal.
- The South Carolina Supreme Court granted certiorari and affirmed the circuit court’s summary judgment on the merits, concluding the banks owed no duty to Overland.
- The Court also clarified that Rule 59(e)’s ten-day deadline to move to alter or amend a judgment is absolute and cannot be extended by the trial court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether banks owed a duty to Overland (a non-customer) for allegedly processing forged checks that enabled embezzlement | Banks breached duties by accepting/processing forged checks, proximately causing Overland's loss | No duty existed to Overland because it was not a bank customer or intended third-party beneficiary | Court held banks owed no duty to Overland; summary judgment affirmed |
| Whether bank processing standards required examination of instruments | Overland argued banks should have examined checks and caught forgeries | Banks relied on commercial standards and statute permitting automated processing without examination when procedures complied with general banking usage | Court referenced statutory standard allowing automated processing without examination under reasonable commercial standards; implied no breach |
| Whether a trial court may extend Rule 59(e) deadline | Overland sought relief after court denied timely Rule 59(e) compliance | Banks/authorities asserted Rule 59(e) deadline is absolute and not extendable | Court held the ten-day Rule 59(e) deadline is absolute; trial court cannot extend it |
| Proper procedural recourse after failure to timely file Rule 59(e) motion | Overland sought reconsideration despite lateness | Authorities: appeal is the proper recourse once Rule 59(e) deadline lapses | Court held failure to serve Rule 59(e) within ten days converts order into final judgment; only recourse is appeal |
Key Cases Cited
- Oblachinski v. Reynolds, 391 S.C. 557 (statute and duty discussion in summary judgment context)
- Kerr v. Branch Banking & Tr. Co., 408 S.C. 328 (bank’s limited duty to customers does not extend to non-customers absent intended third-party beneficiary status)
- Leviner v. Sonoco Prods. Co., 339 S.C. 492 (ten-day Rule 59(e) limitation is absolute; trial court loses jurisdiction after deadline)
- Russell v. Wachovia Bank, N.A., 370 S.C. 5 (trial judge generally loses jurisdiction when time to file post-trial motions has elapsed)
- Doran v. Doran, 288 S.C. 477 (Rule 59(e) and trial court power to alter or amend orders within limited time)
- Alston v. MCI Commc'ns Corp., 84 F.3d 705 (federal authority confirming court lacks power to enlarge Rule 59(e) filing period)