In re Huggins (Huggins v. Grant)

658 B.R. 821

IN RE, Scott Matthew HUGGINS, Debtor(s).

Scott Matthew Huggins, Plaintiff(s), v. Louise Coleman Grant, Defendant(s).

C/A No. 23-00184-EG

Adv. Pro. No. 23-80013-EG

United States Bankruptcy Court, D. South Carolina

Signed February 26, 2024

Sean P. Markham, Markham Law Firm, LLC, Mount Pleasant, SC, for Plaintiff.

J. Ronald Jones, Jr., Smith Debnam Narron Drake Saintsing & My, Charleston, SC, for Defendant.

JUDGMENT

Elisabetta G. M. Gasparini, United State Bankruptcy Judge

Based on the findings of fact and conclusions of law set forth in the attached Order of this Court:

1. Judgment is granted in favor of the Defendant Louise Coleman Grant ("Grant") on Plaintiff Scott Matthew Huggins' ("Huggins") First Claim (Eviction and Possession pursuant to the South Carolina Residential Landlord Tenant Act (S.C. Code Ann. § 27-40-10, et al.)), Second Claim (Foreclosure); Third Claim (Breach of Contract); and Fourth Claim (Estoppel), and therefore, these claims are denied;

2. Judgment is granted in favor of Grant on the Third Counterclaim (Breach of Contract). Ownership of the property at 89 America Street, Charleston, South Carolina (the "Property") is hereby divested from Huggins and vested in Grant. Huggins shall execute a general warranty deed transferring title to the Property to Grant within forty-five (45) days of the entry of the Order. Pursuant to the Option to Repurchase Agreement entered on January 13, 1998 between Huggins and Grant (the "Option Agreement"), Grant shall pay Huggins $10.00 and shall also pay the attorney's fees related to the preparation of any documents required to revest the property in Grant's name;

3. Judgment is granted in favor of Grant on the Fourth Counterclaim (Declaration of Equitable Mortgage). The 1998 Contract and Option Agreement constitute an equitable mortgage and Grant's obligations arising thereunder have been satisfied. Accordingly, she is entitled to receive title to the Property free and clear of any further obligation to Huggins, but subject to the outstanding mortgage to Wells Fargo;

4. Judgment is granted in favor of Huggins on the First Counterclaim (False Pretenses, False Representations or Actual Fraud), Second Counterclaim (Violation of the South Carolina Unfair Trade Practices Act), and Fifth Counterclaim (Unjust Enrichment); and therefore, these counterclaims are denied 5. Within sixty (60) days of the entry of the Order, Grant shall reimburse Huggins for the real estate taxes and hazard insurance he paid for the Property for the years 2019 through the date of the Order upon Huggins presenting her with documentation of their payment, less any amount Grant paid for 2017 and 2018 taxes of $4,101.30, in the total amount of $10,614.01 plus any additional amounts that may have come due in or after 2023.

6. All other requests for relief are denied.

ORDER AND MEMORANDUM OPINION

THIS MATTER is before the Court on the Amended Complaint filed by Scott Matthew Huggins ("Huggins") against Louise Coleman Grant ("Grant").¹ This action was initially filed in the South Carolina Court of Common Pleas in 2020, Case No. 2020-CP-10-03614, but was removed to this Court by the Notice of Removal filed on February 22, 2023.² Grant consented to the removal of the action to this Court.³ Removal is proper under Fed. R. Bankr. P. 9027 and 28 U.S.C. § 1452(a). The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334, 157, and 1452. This is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(A), (K), and (O).

This adversary proceeding arises from a real estate transaction that took place 26 years ago between the parties—in January of 1998—regarding property at 89 America Street in Charleston, South Carolina ("the Property"), where Grant currently resides. The issue boils down to a simple question: Who is the current owner of the Property? The answer, however, is not as simple and can only be reached after sifting through numerous legal and evidentiary issues. In the Amended Complaint,⁴ Huggins alleges causes of action for (1) possession under S.C. Code Ann. § 27-40-10, (2) foreclosure, (3) breach of contract, and (4) estoppel. Grant filed an Answer and Counterclaims (the "Answer"),⁵ alleging the following affirmative defenses (the "Affirmative Defenses"): equitable doctrines of unclean hands, duress, laches, estoppel, and/or waiver; collateral estoppel/res judicata; offset; unauthorized practice of law; violations of the Realtor's Code of Ethics and Standards of Practice; payment; lack of consideration; fraud; and prior breach. In the Answer, Grant also alleges the following counterclaims: (a) false pretenses, false representations, or actual fraud; (b) violation of the South Carolina Unfair Trade Practices Act; (c) breach of contract; (d) declaration of equitable mortgage; and (e) unjust enrichment (the "Counterclaims"). On June 23, 2023, the parties submitted a joint pre-trial order which was entered by the Court, stipulating to various facts.⁶ The parties attempted to resolve their claims through mediation but were unsuccessful. After the conclusion of a two-day trial, the Court took the matter under advisement.

The Court entered an Amended Consent Scheduling Order on April 14, 2023, which provided that "[t]o the extent there is any dispute amongst the parties as to whether the entry of final orders or judgments by this Court on any issue in this adversary proceeding or to the extent that a party wants to seek withdrawal of the reference or a motion for abstention, any such motion should be filed by April 29, 2023."⁷ No motion was filed by that deadline. In her Answer, Grant agreed that this matter is properly before the Court, that the Court has jurisdiction over the claims and this Adversary Proceeding, and that this is a core proceeding that is related to Huggins' bankruptcy case. Accordingly, the Court may enter final orders or judgments in this adversary proceeding.

Based upon the findings of fact and conclusions of law set forth below, the Court finds in favor of Grant and dismisses Huggins' claims.⁸

FINDINGS OF FACT

THE PROPERTY

Grant and her late husband, Andrew Grant, purchased the Property in 1973 and acquired title as co-owners. The Property was encumbered by a Veterans Administration mortgage loan held by Fleet Mortgage Corp. (the "Fleet Mortgage"), with an original principal balance of $20,450.00 at an interest rate of 7.00%. Under the Fleet Mortgage, the Grants were to pay $136.20 per month for 360 months, with a maturity date of June 2003.⁹ Grant testified that at the time of the purchase of the Property, she and her husband were separated, and he never resided there. Grant has continuously resided in the Property since 1973 and made payments on the Fleet Mortgage, building up significant equity. Grant's eight children also resided in the Property until they finished school and moved out.

On September 13, 1996, Andrew Grant passed away. Grant and her husband never formally divorced. At the time of his death, Mr. Grant was apparently living with his second wife, Stella Grant, in McClellanville, South Carolina. Mr. Grant's death created a cloud on the title to the Property due to his heirs' claims to it.

FORECLOSURE ACTION

Grant defaulted on the mortgage in June of 1997. On or about December 18, 1997, Fleet Mortgage Corp. filed a lawsuit in Charleston County seeking to foreclose its mortgage on the Property, Case No. 97-CP-10-5667 (the "Foreclosure Action").¹⁰ At the time of the Foreclosure Action, the Fleet Mortgage could have been reinstated by payment of $4,922.90 and could have been paid in full for $7,961.34 plus interest and other costs.¹¹ Property tax records from 1998 reflect that the Property had an appraised value of approximately $57,400.00.¹² Accordingly, it appears that Grant had equity in the Property of approximately $50,000.00.

In 1997, Huggins was 24 years old and was attending school for a post-secondary degree and working in the medical field in Charleston, SC. He became interested in pursuing real estate investments by targeting distressed homes facing foreclosure actions. While he eventually obtained a post-graduate degree and real estate license, in 1997 he was not yet licensed as a real estate agent or broker and had never made any prior real estate deals. Huggins testified that in December of 1997 he went to the Clerk of Court for Charleston County and pulled multiple foreclosure files from the court's records to look for possible investment opportunities. He then knocked on the doors of approximately 30 different properties he had identified. In December 1997 or early January 1998, he approached Grant at her home, unsolicited, and offered to help her save the Property from foreclosure. At that time, Grant was approximately 51 years old and was working at a local hospital sterilizing surgical instruments. Grant testified that she welcomed Huggins' assistance because she was reluctant to ask her children for help. She had planned to ask some family members for financial assistance, but before she reached out to her extended family, Huggins came to her home and offered to help pay off the Fleet Mortgage in exchange for payments of $219 per month.

The parties offered somewhat different accounts of the nature of the meeting and the discussions that took place—recollections that may have been affected by the passage of 26 years. Huggins testified that he did not recall whether Grant agreed to sell the Property at the initial meeting. He further testified that he wanted to help Grant with her financial hardship and resolve the pending foreclosure of the Property. Grant testified that Huggins stated he was "her guardian angel, the Lord sent me here because I see you in trouble." Grant thought she could trust Huggins because he looked like a "church man ... somebody you could trust." She stated she met alone with Huggins at the initial meeting and that he told her he was there to help because her Property was in foreclosure. She...