RFT Management Co. v. Tinsley & Adams L.L.P.
399 S.C. 322
S.C.2012Background
- RFT Management contracted Law Firm to close real estate purchases of two Planters Row lots near Lake Greenwood (October 30, 2007 closing).
- Developer had previously sold the lots to Grimshaw and Robertson and agreed buy-backs; Developer later lacked funds to complete amenities.
- Law Firm’s retainer limited to ministerial closing acts, not substantive negotiation or advice.
- RFT alleged: (i) legal malpractice, (ii) breach of fiduciary duty, (iii) UTPA violations, (iv) SCUSA aiding/abetting violations; trial court directed verdicts on UTPA and SCUSA claims.
- The jury found in favor of Law Firm on the legal malpractice claim after merger of the fiduciary claim; RFT appealed and the Court of Appeals certified the case for review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conflict of interest at closing (dual representation) | RFT contends unwaivable conflict existed. | Law Firm argues questions of fact; retainer limited to ministerial acts. | No reversible error; questions of fact for the jury; no JNOV. |
| Disclosure/flip transaction allegations | Law Firm failed to disclose material facts and arranged a deceptive flip. | Retainer and scope limited; no deceit shown; evidence supported verdict. | Grounds for JNOV/new trial not met; jury properly weighed evidence. |
| Breach of fiduciary duty vs. legal malpractice merger | Fiduciary duty independently actionable. | Claims duplicate given attorney-client relationship. | Breach of fiduciary claim duplicative and barred where legal malpractice adjudicated. |
| UTPA applicability to legal professionals | UTPA applies to professional services; deceptive acts by Law Firm. | Regulated-industries exemption applies; legal services excluded. | Exemption misapplied; nonetheless no reversible error given underlying verdict. |
| Aiding and abetting SCUSA violation | Transaction qualified as a security; Firm aided violation. | Even if security, retainer limited scope precluded liability. | Directed verdict affirmed; no liability under SCUSA. |
Key Cases Cited
- Rydde v. Morris, 381 S.C. 643, 675 S.E.2d 431 (2009) (elements of legal malpractice remain fourfold)
- Smith v. Haynsworth, Marion, McKay & Geurard, 322 S.C. 433, 472 S.E.2d 612 (1996) (attorney-client relationship as fiduciary basis; standard of care matters)
- In re McCracken, 346 S.C. 87, 551 S.E.2d 235 (2001) (directed verdict renewals and record preservation)
- Gov't Emps. Ins. Co. v. Mackey, 260 S.C. 306, 195 S.E.2d 830 (1973) (directed verdict/jnov standards; evidence review)
- Strange v. S.C. Dep’t of Highways & Pub. Transp., 314 S.C. 427, 445 S.E.2d 439 (1994) (standard for denying/ granting directed verdict; reasonable inferences)
- Ward v. Dick Dyer & Assocs., 304 S.C. 152, 403 S.E.2d 310 (1991) (exemption scope for regulated activities; purpose of exemption)
- Taylor v. Medenica, 324 S.C. 200, 479 S.E.2d 35 (1996) (UTPA coverage includes professional services; not excluded per se)
- Pepper v. Routh Crabtree, APC, 219 P.3d 1017 (Alaska 2009) (attorney regulation coexistence with consumer protection)
- Se. Hous. Found. v. Smith, 380 S.C. 621, 670 S.E.2d 680 (Ct.App.2008) (fiduciary and professional duties interplay)
- McEntire v. Mooregard Exterminating Servs., Inc., 353 S.C. 629, 578 S.E.2d 746 (Ct.App.2003) (thirteenth juror doctrine scope and discretion)
- In re Barbare, 360 S.C. 560, 602 S.E.2d 382 (2004) (flip transactions; closing disclosures impact)