Baird v. Charleston County

511 S.E.2d 69, 333 S.C. 519, 1999 S.C. LEXIS 11
CourtSupreme Court of South Carolina
DecidedJanuary 18, 1999
Docket24885
StatusPublished
Cited by117 cases

This text of 511 S.E.2d 69 (Baird v. Charleston County) is published on Counsel Stack Legal Research, covering Supreme Court of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baird v. Charleston County, 511 S.E.2d 69, 333 S.C. 519, 1999 S.C. LEXIS 11 (S.C. 1999).

Opinion

TOAL, Justice:

This case involves the issuance of tax exempt bonds by Charleston County (“Count/’) for the purchase and renovation of a medical care facility. A group of Charleston doctors (“Doctors”) sued to enjoin the issuance of the bonds. The circuit court granted County’s motion to dismiss and also granted summary judgment on several issues. We affirm in part and reverse in part.

Factual/Procedural Background

The Medical University of South Carolina (“MUSC”) had plans to build an out-patient clinical practice facility on its campus. As plans for the new facility were being developed, an opportunity to purchase the St. Francis Hospital facility adjacent to the MUSC campus became available. MUSC determined that the St. Francis facility could be utilized to house its clinical practice programs. University Medical Associates (“UMA”) 1 of MUSC chose to pursue tax-exempt bonds under the Hospital Revenue Bond Act, S.C.Code Ann. § 44-7-1410 et seq. (1976 & Supp.1997) (the “Act”), to fund the purchase price and renovation cost for the St. Francis facility.

Charleston County Council approved a bond ordinance on December 31, 1996, issuing $85 million in tax-exempt hospital revenue bonds for the purchase and renovation of St. Francis Hospital. County Council approved the bonds after a third *525 reading of the ordinance. The bonds will be the limited obligation of Charleston County payable from the revenues of UMA’s clinical practice program. It is estimated that if such hospital bonds are not issued, MUSC could pay over $25 million more in interest costs over the life of the loan to acquire the facility and over $12 million for the renovation costs of the facility. On April 8, 1997 the State Budget and Control Board, by a vote of 5 to 0, approved the issuance of the bonds. 2

On June 7, 1997, Doctors sued to enjoin the issuance of the hospital revenue bonds. 3 The defendant, County, made a Rule 12(b) motion to have Doctors’ complaint dismissed. 4 The trial court granted County’s motion, making the following conclusions: (1) Doctors lacked standing to sue; (2) pursuant to the “Enrolled Bill Rule,” Doctors could not go behind the collective action of the county council; (3) there was no allegation or proof of any alleged conflict on the part of those voting to pass the Ordinance after the third reading; (4) the trial court did not have jurisdiction to review the conflict of interest claim; (5) the record did not substantiate a conflict of interest on the part of Dr. Wallace; (6) UMA is a “hospital agency” that may participate in the issuance of tax-exempt hospital revenue bonds;' (7) nothing substantiates that UMA is engaged in the unlawful practice of clinical medicine and, additionally, the proper defendant for such a claim is UMA not County; and (8) Doctors failed to fulfill the statutory conditions precedent to filing the lawsuit.

Doctors appealed, raising the following issues:

*526 (1) Whether physicians who directly compete with the proposed beneficiaries of a hospital revenue bond have standing to challenge the issuance of those bonds?
(2) Whether the issuance of bonds should be invalidated because of Dr. Wallace’s participation on county council?
(3) Whether UMA may be considered a “hospital agency” or a “public agency” such that it may receive tax-exempt bonds pursuant to the Hospital Revenue Act?
(4) Whether UMA is engaged in the unlawful practice of medicine and, if so, whether that prevents UMA from receiving the tax-exempt bonds?
(5) Whether Doctors were required to comply with the procedure set forth in S.C.Code Ann. § 15-77-20 (1976) in filing this lawsuit?
(6) Whether summary judgment was proper under the facts of this case?

Law/Analysis

A. Conversion of 12(b)(6) Motions

There has been much confusion in this case over whether the trial court properly granted summary judgment on several of the issues. County’s original motion before the trial court was a motion to dismiss made pursuant to Rule 12(b), SCRCP, and included, among others, the following arguments: (1) Doctors failed to comply with the procedure in S.C.Code Ann. § 15-77-20 (1976) in instituting this action; (2) Doctors lacked standing; (3) the trial court did not have subject matter jurisdiction over the conflict of interest claim; (4) Doctors failed to state a cause of action concerning the third reading of the Bond Ordinance; and (5) the trial court lacked subject matter jurisdiction and/or Doctors failed to state a cause of action as to whether UMA was a “hospital agency” or “public agency” and whether UMA was authorized to practice medicine. At the motion hearing, Doctors’ attorney reminded the trial court that this was a hearing to consider County’s motion to dismiss and complained about affidavits submitted by County in support of its motion. The trial court nevertheless granted summary judgment on several of the issues.

*527 Under Rule 12(b)(6), SCRCP, a defendant may make a motion to dismiss based on a failure to state facts sufficient to constitute a cause of action. Generally, in considering a 12(b)(6) motion, the trial court must base its ruling solely upon allegations set forth on the face of the complaint. Stiles v. Onorato, 318 S.C. 297, 457 S.E.2d 601 (1995). The 12(b)(6) motion may not be sustained if the facts alleged and inferences therefrom would entitle the plaintiff to any relief on any theory. Id. Rule 12(b) further provides:

If on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state facts sufficient to constitute a cause of action, matters outside the -pleading are presented to and not excluded by the Court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Rule 12(b), SCRCP (emphasis added). We have interpreted this language as meaning “the trial court may treat a 12(b)(6) motion as a motion for summary judgment and consider matters presented outside the pleadings if the parties are afforded a reasonable opportunity to respond to such matters in accordance with Rule 56(c) and (e) of the South Carolina Rules of Civil Procedure. The notice provisions in Rule 56 are incorporated into Rule 12(b)(6).” Brown v. Leverette, 291 S.C. 364, 367, 353 S.E.2d 697, 698-99 (1987); see also Johnson v. Dailey, 318 S.C. 318, 457 S.E.2d 613 (1995). In Brown, we found the trial court had not given notice to the parties that it was going to consider the affidavits and hear the 12(b)(6) motion as a motion for summary judgment. Thus, the supporting affidavits in Brown

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Cite This Page — Counsel Stack

Bluebook (online)
511 S.E.2d 69, 333 S.C. 519, 1999 S.C. LEXIS 11, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baird-v-charleston-county-sc-1999.