730 S.E.2d 328
S.C. Ct. App.2012Background
- Smith appeals the Master-in-Equity's grant of Wells Fargo's motion to strike the jury demand in a foreclosure action on a Note and Mortgage securing property and a mobile home.
- Smith asserted counterclaims for accounting, unconscionability (common law and statutory), and violation of the Attorney Preference statute (37-10-102).
- Master granted the motion to strike the jury demand; Smith's Rule 59(e) motion to alter or amend was denied; appeal followed.
- Rule 53 governs master's authority; once referred, a master has the same power as a circuit court judge in a similar matter, within the scope of the reference.
- Foreclosure is an equity action; jury rights depend on whether counterclaims are legal and compulsory; the case involves analysis of jurisdiction, jury-trial rights on counterclaims, and scope of the strike motion.
- The court affirms in part, reverses in part, and remands for a bench trial on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Master had subject matter jurisdiction to rule on the jury-strike motion | Smith contends the Master exceeded jurisdiction and the case should have been circuit court. | Wells Fargo argues the Master acted within Rule 53 authority under the order of reference. | Master had jurisdiction to rule on the strike under Rule 53. |
| Whether common law unconscionability entitles a jury trial | Smith asserts compulsory counterclaim and right to jury trial. | Unconscionability is equitable; no jury trial for common law unconscionability. | Common law unconscionability is equitable; no right to jury trial; counterclaim barred from jury. |
| Whether statutory unconscionability under §37-5-108 entitles a jury trial | Smith seeks jury trial for statutory unconscionability. | Statutory unconscionability is decided by the court, not a jury. | Statutory unconscionability is decided by the court; no jury trial. |
| Whether the Attorney Preference statute §37-10-102(a) claim is a jury-trial issue | Smith claims violation warrants jury trial. | Claim is permissive and does not affect enforceability of Note/Mortgage; waives jury by assertion. | Claim is permissive; does not entitle jury trial; right waived. |
| Whether the Master exceeded the scope of the motion to strike by making findings of fact/law | Smith argues the order used evidence outside pleadings to deny; improper scope. | Master acted within the motion's scope. | Master abused discretion by making fact-findings outside admissible evidence; remand for bench trial. |
Key Cases Cited
- Brown v. Coastal States Life Ins. Co., 264 S.C. 190 (1975) (standard for review of motions to strike and evidentiary discretion)
- Mayes v. Paxton, 313 S.C. 109 (1993) (abstention on appellate review of trial court rulings on jury demands)
- C & S Real Estate Servs., Inc. v. Massengale, 290 S.C. 299 (1986) (whether counterclaims are compulsory based on logical relationship to foreclosure)
- N.C. Fed. Sav. & Loan Ass’n v. DAV Corp., 298 S.C. 514 (1989) (logical-relationship test for compulsory counterclaims)
- U.S. Bank Trust Nat’l Ass’n v. Bell, 385 S.C. 364 (Ct.App.2009) (foreclosure is an equitable action; affects jury rights)