Johnson v. Town of Town of Iva

THIS OPINION
HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN
ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Willie Johnson,
William Wooten, Bronsil Metz, Robert Valentine, Johnnie Metz, Barbara Brown,
Emogene Carver, Dennis Metz, Curtis Carver, Randall Shirley, Dorothy Smith,
Louise McGill, Roy Graham, Furman Manlay, Henry Holley and Annette Holley, Appellants,

v.

Town of Iva,
Iva City Council and Mayor Bobby Gentry (in their official capacities) and
Anthony Burdette, Respondents.

Appeal From Anderson County

Alexander S. Macaulay, Circuit Court
Judge

Unpublished Opinion No. 2011-UP-076

Heard September 16, 2010 – Filed February
24, 2011  

AFFIRMED AS MODIFIED

Donald Gist and John S. Nichols, both of Columbia, for Appellants.

Mary C. McCormac, of Clemson, for Respondents.

PER CURIAM: Willie
Johnson and other property owners in the Town of Iva (Appellants) appeal the
trial court's order granting summary judgment to the Town of Iva, Iva City
Council, and Mayor Bobby Gentry (Respondents).  We affirm as modified. 

FACTS/PROCEDURAL HISTORY

In November of 2001, vendors
contacted Shirley Powell, then Mayor of the Town, requesting late payment of
the Town's bills.  Upon her inquiry, Town Clerk Anthony Burdette claimed he
purchased items for his father-in-law's business using the Town's funds. 
Powell further found the Town was in severe debt and did not have the revenue
coming in to cover expenses.  She requested an investigation and hired
certified public accountants to audit the Town for the fiscal year ending on
June 30, 2001.  The auditor found the Town's finances were poorly kept and
handled.  Due to several irregularities the auditor was unable to verify the
exact amount of money missing or pinpoint the wrongdoing.  The auditor
discovered the Town had an abundance of supplies it did not need and invoices
for merchandise it did not need.  Taxes, water bills, and insurance premiums
were not up to date.  In addition, people were allowed to make partial payments
on their utilities.  The auditor found the Town had not paid state retirement
since June 2000, had not paid federal and state withholding tax, had not filed
quarterly payroll tax reports for 2001, and had not paid police remittance of
fines to the state since October of 2000.  The Town had no cash to pay bills,
books had not been kept since October of 2000, property tax notices had not
been mailed, and other bills remained unpaid.  In addition, there was a
substantial problem with the cemetery funds. 

In order to alleviate its
financial problems, the Town passed an ordinance in February of 2002 increasing
the water and sewer bills.  It adopted an ordinance to increase the property
taxes by 21.1% in July 2002.  The increased property tax notices were mailed in
September and October 2002. 

Appellants brought this
action against Respondents on May 5, 2005. They asserted causes of action for
negligence/gross negligence, civil conspiracy, fraud/misrepresentation,
constructive fraud, conversion, breach of fiduciary duty, negligent
supervision, and violation of the Freedom of Information Act.[1] 
Respondents filed a motion for summary judgment, asserting, among other issues,
Respondents were immune from liability under the South Carolina Tort Claims Act
(the Act)[2] and the two-year statute of limitation for actions brought under the Act[3] had run.  Appellants asserted they had no notice of the Respondents' wrongdoing
until they received a copy of a report from the South Carolina Law Enforcement
Division (SLED) in early 2004 addressing the Town's alleged mismanagement. 

The trial court held Appellants'
claims were barred by the statute of limitations.  The trial court rejected Appellants'
argument that Respondents were estopped from asserting the statute of
limitations.  In addition, it found Respondents had not violated the Freedom of
Information Act.  It did not address Respondents' other issues.  Appellants
filed a motion to alter or amend, which the trial court denied.  This appeal
followed. 

LAW/ANALYSIS

Appellants argue the trial
court erred in granting summary judgment on their claims.  We find Appellants'
claims fall within the Act's exceptions to the waiver of immunity and thus fail
as a matter of law.[4] 

The Act "is the
exclusive and sole remedy for any tort committed by an employee of a
governmental entity while acting within the scope of the employee's official
duty."  S.C. Code Ann. § 15-78-200 (2005).  The courts must liberally
construe the Act in favor of limiting the liability of the governmental
entity.  Id.  The Act sets forth several exceptions to the waiver of
liability.  It provides:

The
governmental entity is not liable for a loss resulting from:

(1)
legislative, judicial, or quasi-judicial action or inaction;

(2)
administrative action or inaction of a legislative, judicial, or quasi-judicial
nature;

. . . .

 (4)
adoption, enforcement, or compliance with any law or failure to adopt or
enforce any law, whether valid or invalid, including, but not limited to, any
charter, provision, ordinance, resolution, rule, regulation, or written
policies;

(5) the
exercise of discretion or judgment by the governmental entity or employee or
the performance or failure to perform any act or service which is in the
discretion or judgment of the governmental entity or employee;

. . . .

 (11)
assessment or collection of taxes or special assessments or enforcement of tax
laws. . . .  

S.C. Code Ann. § 15-78-60
(2005) (emphasis added). 

The Act defines the word "loss"
as

bodily
injury, disease, death, or damage to tangible property, including lost wages
and economic loss to the person who suffered the injury, disease, or death,
pain and suffering, mental anguish, and any other element of actual damages
recoverable in actions for negligence, but does not include the intentional
infliction of emotional harm.

S.C. Code Ann. § 15-78-30(f)
(2005).

 Appellants asserted causes
of action for negligence/gross negligence, civil conspiracy,
fraud/misrepresentation, constructive fraud, conversion, breach of fiduciary
duty, and negligent supervision.  They insisted in their memorandum opposing
summary judgment that this is not a taxpayer action.  Thus, their claims are
subject to the Act.  However, the only economic "loss" Appellants
claim directly resulted from the increase in taxes and water/sewer bills.  Appellants
alleged:  "As a result of the town's mismanagement, the town became
insolvent and citizens have been subjected to increased property taxes and
water and sewage bills."  The Town's enactment of ordinances increasing
the taxes and water/sewer bills falls within the above-listed exceptions to
liability.  We find the Act does not permit Appellants to establish tort
liability by looking toward the reasons the Town may have enacted these
ordinances when the enactment of the ordinances is clearly protected under the
Act.  Accordingly, the Respondents are immune from Appellants' claims and
summary judgment was appropriate. 

The order of the trial court
granting Respondents' motion for summary judgment is

AFFIRMED AS MODIFIED. 

FEW, C.J., and HUFF and
GEATHERS, JJ. concur. 

[1] S.C. Code Ann. §§ 30-4-10 to -165 (2007 & Supp. 2010).

[2] S.C. Code Ann. § 15-78-10 to -220 (2005 & Supp. 2010).

[3] S.C. Code Ann. § 15-78-110 (2005). 

[4]See Rule 220(c), SCACR (noting "[t]he appellate court may affirm
any ruling, order, decision or judgment upon any ground(s) appearing in the
Record on Appeal"); see also I'On, L.L.C. v. Town of Mt.
Pleasant, 338 S.C. 406, 420, 526 S.E.2d 716, 723 (2000).