Fullbright v. Spinnaker Resorts, Inc.

420 S.C. 265

802 S.E.2d 794

Paula FULLBRIGHT and Mark Fullbright, Plaintiffs,

v.SPINNAKER RESORTS, INC., d/b/a Spinnaker Resorts South Carolina, Inc., Defendant.andPaul Chenard and Rebecca Chenard, Plaintiffs,

v.Hilton Head Island Development Co., L.L.C., d/b/a Coral Resorts and Sunrise Vacation Properties, Ltd., d/b/a Coral Resorts, Defendants.

James Nichols and Irene Nichols, Plaintiffs,

v.Hilton Head Island Development Co., L.L.C., Sunrise Vacation Properties, Ltd., Sherri J. Smith, Patrick Budnik, and Robert Lauderman, d/b/a Coral Resorts, Defendants.

Linda Renchkovsky, Plaintiff,

v.Coral Resorts, L.L.C. and Sunrise Vacation Properties, Ltd., d/b/a Coral Resorts, Defendants.

Robert Curry, Jr. and Monica R. Curry, Plaintiffs,

v.Hilton Head Island Development Co., L.L.C., d/b/a Coral Resorts and Sunrise Vacation Properties, Ltd., d/b/a Coral Resorts, Defendants.

Charles Olenick and Karen Maniscalco, Plaintiffs,

v.Coral Resorts, L.L.C. and Sunrise Vacation Properties, Ltd., d/b/a Coral Resorts, Defendants.

Phillip Ross and Kimberly Ross, Plaintiffs,

v.Hilton Head Island Development Co., L.L.C., Sunrise Vacation Properties, Ltd., Sherri J. Smith, David Watson, and Sheldon Stanhope, Defendants.

Appellate Case No. 2016-001765

Appellate Case No. 2016-001766

Opinion No. 27720

Supreme Court of South Carolina.

Heard February 8, 2017

Filed May 17, 2017

Rehearing Denied August 22, 2017

Joseph DuBois and Zach S. Naert, both of Naert & DuBois, L.L.C., of Hilton Head Island, for Plaintiffs.

Barry L. Johnson, of Johnson & Davis, P.A., of Bluffton, for Defendant Spinnaker Resorts, Inc., d/b/a Spinnaker Resorts South Carolina, Inc. Nekki Shutt, Kathleen M. McDaniel, and Jacqueline M. Pavlicek, all of Callison Tighe & Robinson, L.L.C., of Columbia, for Defendants Coral Resorts, L.L.C. and Hilton Head Island Development Co., L.L.C.; Thornwell F. Sowell, III and Bess J. DuRant, both of Sowell Gray Stepp & Laffitte, L.L.C., of Columbia, for Defendants Sunrise Vacation Properties, Ltd., Sherri J. Smith, David Watson, Sheldon Stanhope, and Robert Lauderman; and James E. Smith, Jr., of James E. Smith, Jr., P.A., of Columbia, for Defendants.

Angus H. Macaulay and Michael P. Scott, both of Nexsen Pruet, LLC, of Columbia, for amicus curiae, American Resort Development Association. R. Hawthorne Barrett, of Turner Padget Graham & Laney, P.A., of Columbia, for amicus curiae, Myrtle Beach Area Chamber of Commerce.

CERTIFIED QUESTIONS

JUSTICE KITTREDGE :

The Court agreed to answer the following certified questions from the United States District Court for the District of South Carolina:

1. Does the South Carolina Real Estate Commission have exclusive jurisdiction to determine whether a violation of the South Carolina Vacation Time Sharing Plans Act¹ (the Timeshare Act) has occurred?

2. Is the South Carolina Real Estate Commission's determination of a violation of the Timeshare Act a condition precedent to a purchaser bringing a private cause of action to enforce the provisions of the Timeshare Act?

3. Are the South Carolina Real Estate Commission's determinations as to whether the Timeshare Act was violated binding on courts of the judicial branch?

These questions arose from two sets of litigation (Fullbright and Chenard ) in the federal district court involving individuals (collectively, Plaintiffs) who entered into contracts with developers (collectively, Defendants) to purchase interests in vacation time sharing plans (timeshare plans) for real estate on Hilton Head Island. As these cases present the same legal questions, they were consolidated for oral argument before the Court. We now resolve them in a single opinion.

Because the Timeshare Act contains an unambiguous provision authorizing a purchaser or lessee to bring a private action to enforce the Act, we are constrained to answer the first two questions "no." We also answer the third question "no," provided the South Carolina Real Estate Commission's decision has not been subjected to judicial review.

I.

On June 24, 2014, Paula and Mark Fullbright (the Fullbrights) entered into a contract with Spinnaker Resorts, Inc. (Spinnaker) to purchase an interest in a timeshare plan for the company's Hilton Head resort, Bluewater by Spinnaker (Bluewater). The Fullbrights commenced a purported class action against Spinnaker on April 2, 2015, and filed an amended complaint on May 20, 2015, alleging Spinnaker violated the Timeshare Act by failing to comply with the Act's registration requirements.² The Fullbrights sought the return of all money paid under the contract, with interest, as well as a declaration that the contract was invalid and nonbinding.

After the Fullbrights filed the lawsuit, the South Carolina Real Estate Commission (the REC) issued an order dated September 15, 2015,³ stating that Bluewater had been issued an order of registration effective September 2, 2014. Significantly, the REC order provided that Bluewater's registration was retroactive to March 15, 2006. The retroactive registration was significant in that the REC sought to deem Bluewater's registration in effect on the date of the Fullbrights' purchase.

Spinnaker moved to dismiss the complaint for lack of subject matter jurisdiction, but the federal district court, believing the case involved novel questions of South Carolina law, denied the motion.

Like the Fullbrights, the plaintiffs in the Chenard cases are individuals that entered into contracts to purchase interests in timeshare plans for Hilton Head resorts. In addition to claims for violations of the Timeshare Act, they brought claims for, among other things, fraud, negligent misrepresentation, and violations of the South Carolina Unfair Trade Practices Act.⁴ Their claims under the Timeshare Act included allegations that the timeshare plans they agreed to were not properly registered with the REC, and they sought to void their purchase contracts. The Chenard defendants moved to dismiss the Timeshare Act claims, arguing that the REC has exclusive jurisdiction to investigate violations of the Act and, therefore, the court lacked subject matter jurisdiction. The court denied the motion, stating that the Timeshare Act "also contemplates a private right of action." Chenard v. Hilton Head Island Dev. Co. , No. 9:14-3347-SB, 2016 WL 7183047, at *3 (D.S.C. Mar. 30, 2016). The court also noted that there were cases involving similar allegations currently pending in state court and, to minimize conflicts between the ongoing state and federal litigation on this novel issue, solicited proposed questions for certification to this Court. See id. at *1, *3 n.4.

After further briefing by the parties, the court issued certification orders, and we agreed to answer the questions listed above. In answering these questions, we express no opinion as to the merits of Plaintiffs' claims, the resolution of which remains in the federal district court.

II.

The questions posed to the Court are aimed at clarifying the extent of the REC's authority to regulate the time sharing industry and what role, if any, the courts have in that process. Plaintiffs argue they have a constitutional and statutory right to initiate judicial proceedings without regard for the REC's actions, whereas Defendants argue public policy requires the REC have broad and exclusive jurisdiction to enforce the Timeshare Act.

A.

In resolving this dispute, we must be cognizant of our role as a court. Defendants frame these certified questions in terms of public policy, appeals to which dominate their arguments. Determinations of public policy, however, are chiefly within the province of the legislature, whose authority on these matters we must respect. See, e.g. , Taghivand v. Rite Aid Corp. , 411 S.C. 240, 244, 768 S.E.2d 385, 387 (2015) (recognizing that the " ‘primary source of the declaration of the public policy of the state is the General Assembly; the courts assume this prerogative only in the absence of legislative declaration’ " (quoting Citizens' Bank v. Heyward , 135 S.C. 190, 204, 133 S.E. 709, 713 (1925) )). "The General Assembly has a right to pass such legislation as in its judgment may seem beneficial to the State, and to create such agencies of government as may be necessary to carry out its purpose, unless expressly prohibited by the Constitution." Clarke v. S.C. Pub. Serv. Auth. , 177 S.C. 427, 438–39, 181 S.E. 481, 485 (1935).

When examining statutes, "[t]he cardinal rule of statutory construction is to ascertain and give effect to the intent of the legislature." Brown v. Bi-Lo, Inc. , 354 S.C. 436, 439, 581 S.E.2d 836, 838 (2003) (citing Charleston Cty. Sch. Dist. v. State Budget & Control Bd. , 313 S.C. 1, 5, 437 S.E.2d 6, 8 (1993) ). "If a statute's language is plain, unambiguous, and conveys a clear meaning[,] ‘the rules of statutory interpretation are not needed and the court has no right to impose another meaning.’ " Id. (quoting Hodges v. Rainey , 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000) ). "On the other hand, where a statute is ambiguous, the Court must construe the terms of the statute." Wade v. Berkeley County , 348 S.C. 224, 229, 559 S.E.2d 586, 588 (2002). "A statute as a whole must receive practical, reasonable, and fair interpretation consonant with the purpose, design, and policy of lawmakers." State v. Henkel , 413 S.C. 9, 14, 774 S.E.2d 458, 461 (2015) (citation and internal quotation marks omitted). "Moreover, it is well settled that statutes dealing with the same subject matter are in pari materia and must be construed together, if possible, to produce a single, harmonious result." Beaufort County v. S.C. State Election Comm'n , 395 S.C. 366, 371, 718 S.E.2d 432, 435 (2011).

B.

The Timeshare Act establishes procedures governing the offering and sale of timeshare plans in South Carolina. These plans, which may or may not include an ownership interest in the subject property, are arrangements by which the purchaser acquires the right to use real estate and associated facilities for a period of time during the year....