Honorage Nursing Home of Florence, S.C., Inc. v. Florence Convalescent Center, Inc.

623 S.E.2d 853, 367 S.C. 108, 2005 S.C. App. LEXIS 246
CourtCourt of Appeals of South Carolina
DecidedNovember 14, 2005
DocketNos. 2002-CP-21-120, 2002-CP-21-1058
StatusPublished
Cited by5 cases

This text of 623 S.E.2d 853 (Honorage Nursing Home of Florence, S.C., Inc. v. Florence Convalescent Center, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Honorage Nursing Home of Florence, S.C., Inc. v. Florence Convalescent Center, Inc., 623 S.E.2d 853, 367 S.C. 108, 2005 S.C. App. LEXIS 246 (S.C. Ct. App. 2005).

Opinion

HEARN, C.J.:

Honorage Nursing Home of Florence, South Carolina, Inc. appeals (1) the circuit court order vacating the default judgment against Florence Convalescent Center, Inc. (FCC), and [111]*111(2) the circuit court’s grant of summary judgment in favor of FCC. We affirm.

FACTS

Honorage Nursing Home instituted this action against FCC for allegedly breaching the lease between the parties for a nursing home building in Florence, South Carolina. In 1975, FCC began leasing the building from Honorage. FCC operated the nursing home from that time until December 31, 2000.

In September of 2000, Genevieve Powell, the President of FCC, informed Howard Clarke, the President of Honorage, that she wanted to terminate the lease and sell the furniture and fixtures in the nursing home to Honorage. Over the course of the next few months, a series of negotiations took place between Clarke’s attorney, Porter Stewart, and Powell’s attorney, John Chase. The attorneys for the parties ultimately entered into a sales agreement on December 29, 2000, which provided for the purchase of the furniture and fixtures and the termination of the lease. The significant terms of the sales agreement were: (1) Honorage agreed to terminate the lease; (2) Honorage forgave the November and December 2000 rent payments that were due under the lease; (3) Honorage agreed to pay the remaining property taxes for 2000; (4) FCC sold Honorage all of the furniture and fixtures in the nursing home, and (5) Honorage agreed to pay FCC $5,000 for FCC’s computers, printers, and modems, together with all software and information therein.

On December 31, 2000, in reliance on the agreement, FCC vacated the nursing home and left behind all furniture and fixtures. Honorage took possession and began operating the nursing home on January 1, 2001.

Honorage filed this action on January 25, 2002, claiming FCC had breached the lease agreement. Honorage sought to recover outstanding rent, taxes, and other items due under the lease. Also on that date, Honorage filed a petition to serve FCC pursuant to section 15-9-210(c) of the South Carolina Code (Supp.2005), claiming it could not locate FCC’s registered agent. The circuit court entered an order allowing Honorage to serve FCC pursuant to this statute. However, the circuit court order incorrectly stated Honorage could serve FCC by mail at “the corporation’s last known place of busi[112]*112ness on record with the Secretary of State’s office.” Section 15-9-210(c) provides the summons and complaint must be sent to “the address of the company’s principal office which is listed on the last filed annual report of the corporation.” The last filed annual report for FCC listed its address as 2512 Newcastle Road, Florence, South Carolina, and stated Powell was the sole director and officer of the corporation.

Thereafter, Honorage mailed the summons and complaint to Route 1, Clarke Road, Florence, South Carolina 29501, which was the address listed with the Secretary of State’s office. This address was the same address used by Honorage’s own registered agent, Howard Clarke, and it was also the physical address for the nursing home that FCC had previously leased for 25 years. Honorage never forwarded the summons and complaint to Powell or FCC.

After mailing the summons and complaint to its own address, Honorage conducted a default judgment hearing on June 4, 2002. Honorage also mailed notice of the hearing to the nursing home only and not to Powell or FCC. Neither FCC nor Powell made an appearance at the damages hearing. On March 19, 2002, the circuit court entered a default judgment against FCC in the amount of $1,281,779. The default order prepared by Honorage also contained a finding that FCC’s “corporate veil is pierced and that its sole shareholder is to be held personally liable for the judgment entered herein.” Powell, however, was not a party to the initial action.

Powell learned of the original judgment when Honorage filed a declaratory judgment action against her to collect the damages. Powell filed a motion to set aside the entry of default against FCC.

The circuit court set aside the entry of default against FCC and also granted FCC summary judgment on the issue of the damages. The circuit court held Honorage had voluntarily terminated the lease as of December 29, 2000, and, therefore, FCC did not breach the agreement. Honorage’s appeal follows.

LAW/ANALYSIS

I. Default Judgment

Honorage argues the circuit court improperly set aside the entry of default against FCC. We disagree.

[113]*113 Upon motion, the circuit court may relieve a party from a final judgment pursuant to Rule 60(b), SCRCP, where the moving party demonstrates the judgment or order was induced by, among other things, mistake, inadvertence, surprise, or excusable neglect. Hillman v. Pinion ex. rel Estate of Hillman, 347 S.C. 253, 256, 554 S.E.2d 427, 429 (Ct.App. 2001). Relief from judgment under Rule 60, SCRCP, rests within the sound discretion of the circuit court, and the circuit court’s findings will not be disturbed on appeal absent an abuse of that discretion. Thompson v. Hammond, 299 S.C. 116, 119, 382 S.E.2d 900, 903 (1989); McCall v. Ikon, 363 S.C. 646, 651, 611 S.E.2d 315, 317 (Ct.App.2005) (rehearing denied).

In this action, Honorage clearly failed to comply with section 15-9-210(c) in attempting to serve FCC. Section 15-9-210(c) clearly provides the summons and complaint must be sent to “the address of the company’s principal office which is listed on the last filed annual report of the corporation.” Honorage did not do so. FCC’s last annual report was filed with the Department of Revenue in March 2001. This annual report indicated FCC’s address for service of process was 2512 Newcastle Road in Florence. FCC was never served at that address and, accordingly, never received notification of the action against it. Because Honorage failed to comply with the service requirements of section 15-9-210(c), the circuit court correctly set aside the entry of default against FCC.

Additionally, any attempt to serve FCC under section 15-9-210(c) was improper. Honorage’s attorney argued to this court that he was under no obligation to locate FCC’s registered agent prior to service under section 15-9-210(c). We strongly disagree.

“A suit at law is not a children’s game, but a serious effort on the part of adult human beings to administer justice; and the purpose of process is to bring parties into court.” McCall, 363 S.C. at 651, 611 S.E.2d at 317 (citing Griffin v. Capital Cash, 310 S.C. 288, 292, 423 S.E.2d 143, 146 (Ct.App. 1992)). Section 15-9-210(c) is designed to assist a party when a corporation has no registered agent or an agent that could not be served with “reasonable diligence.” (emphasis added). In this case, Honorage’s attorney informed the circuit court he had complied with the requirements in section 15-9-210, and [114]*114that he attempted to locate the registered agent for FCC.

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Bluebook (online)
623 S.E.2d 853, 367 S.C. 108, 2005 S.C. App. LEXIS 246, Counsel Stack Legal Research, https://law.counselstack.com/opinion/honorage-nursing-home-of-florence-sc-inc-v-florence-convalescent-scctapp-2005.