Kacey Green v. Mervin Lee Johnson

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

Kacey Green and Charinrath Green, Appellants-
Respondents,

v.

Mervin Lee Johnson, Respondent-Appellant.

Appellate Case No. 2020-001254

Appeal From Orangeburg County
James B. Jackson, Jr., Master-in-Equity

Unpublished Opinion No. 2024-UP-024
Heard October 10, 2023 – Filed January 17, 2024

AFFIRMED IN PART AND VACATED IN PART

Edgar Mason West, of West Law Firm, LLC, of Moncks
Corner; and Charles H. Williams, David Reynolds
Williams, and Virginia Watson Williams, all of Williams
& Williams, of Orangeburg, all for
Appellants-Respondents

Todd Russell Flippin, of Holcombe Bomar, PA, and A.
Walker Barnes, of Boulier Thompson & Barnes, LLC,
both of Spartanburg, for Respondent-Appellant.
PER CURIAM: In this default judgment case, Kacey Green and Charinrath
Green (the Greens) appeal the master-in-equity's (the master's) order granting
Mervin Lee Johnson's Rule 59(e), SCRCP, motion in part and reducing the
damages awarded to them in a default judgment (the Amended Damages Order).
The Greens argue the master erred in (1) hearing Johnson's Rule 59(e) motion, (2)
considering new evidence presented by Johnson at the Rule 59(e) motion hearing,
and (3) misapplying McClurg v. Deaton1 when concluding justification for relief
from default judgment existed. Johnson cross-appeals the master's order denying
his motion to dismiss, or, in the alternative, to set aside the entry of default and
damages and the Amended Damages Order, arguing the master erred in failing to
grant relief from default judgment because (1) the Greens' counsel's made
misrepresentations to Johnson's insurer before filing suit, (2) the Greens' counsel's
pre-suit conduct resulted in surprise or excusable neglect, (3) the damages awarded
included previously satisfied and released claims, and (4) Johnson established a
meritorious defense to the damages awarded. We affirm the master's denial of
Johnson's motion to set aside the default and vacate the Amended Damages Order.

FACTS AND PROCEDURAL HISTORY

On February 28, 2018, Johnson and the Greens were involved in a car accident on
Interstate 26 when Johnson, a tractor-trailer driver employed by CDS Transport,
Inc. (CDS Transport), collided with the back of the Greens' vehicle three times.
On January 11, 2019, the Greens filed a complaint alleging causes of action against
Johnson for negligence and loss of consortium. The Greens filed an affidavit
attesting Johnson was personally served with the complaint on January 26, 2019, at
his mother's home where he also resided. Johnson failed to timely answer, and a
default order was entered on March 8, 2019. Following the damages hearing, an
order awarding the Greens $1,760,00.00 (the Damages Order) was entered on June
5, 2019.
On June 17, 2019, Johnson filed a motion to dismiss, or, in the alternative, to set
aside default pursuant to Rules 55(c) and 60, SCRCP. Johnson's motion to set

1
380 S.C. 563, 573, 671 S.E.2d 87, 92-93 (Ct. App. 2008) (holding employer and
employee met the surprise or excusable neglect requirement under Rule 60(b)(1)
when the plaintiffs had negotiated with the employer and employee's insurer, sent
the insurer a draft complaint naming the employer and employee as defendants,
and stated they would send insurer a copy of the complaint but brought suit against
only the employee without informing the insurer or employer), aff'd, 395 S.C. 85,
716 S.E.2d 887 (2011).
aside the default argued the Greens did not properly serve their complaint, that his
failure to answer the complaint in a timely manner was based on excusable neglect,
and the Damages Order was disproportionate to the actual damages suffered. On
October 17, 2019, four months after filing his motion to set aside the default and
the default judgment and four days prior to the hearing, Johnson filed the affidavits
of Breeann Richardson, claims administrator for CDS Transport, and Nikole
Shields, a senior claims consultant for Claims Direct Access (CDA), the
claims-handling agent of Johnson's insurer. The affidavits both stated CDA spoke
with the Greens' counsel and engaged in settlement negotiations on July 23, 2018,
and that CDS Transport and CDA received a video of the accident and a settlement
demand on August 7, 2018. The affidavits further stated the Greens did not inform
CDS Transport or CDA of the action against Johnson at any point prior to June 7,
2019. The affidavits additionally stated Johnson had been diagnosed with a heart
condition and underwent open heart surgery in November 2018, which kept him
out of work, and noted he was diagnosed with diabetes in June 2019. The master
held a hearing on Johnson's motion on October 21, 2019, but the hearing was not
recorded or transcribed.

On November 4, 2019, the master issued an order denying Johnson's motion to set
aside the default. The master analyzed the motion under Rules 55 and 60, SCRCP.
First, the master found the affidavits did not present good cause to set aside the
default judgment. The master stated the insurer did not have standing to argue the
default judgement should be set aside when it was not a party to the case. Further,
the master found Johnson failed to satisfy the requirements to set aside default
judgment under Rule 60(b), SCRCP, because he did not present a meritorious
defense to liability. The master concluded Johnson's argument regarding
disproportionate damages did not amount to a meritorious defense per McClurg.
On November 14, 2019, Johnson filed Rule 59(e), SCRCP, motion, requesting that
the master alter or amend the order denying his motion to set aside the default.
The master held a hearing on this motion on July 13, 2020.

At the hearing, Johnson argued the master erred in denying his motion to set aside
the default because his insurer had a reasonable expectation it would be notified if
any lawsuit arose out of the accident based on the Greens' counsel's conduct.
Johnson presented evidence in support of his Rule 59(e) motion—including
correspondence between the Greens' counsel and CDA, evidence of a subrogation
claim for the Greens' property damages, and a photograph of the Greens' car after
the accident—that he had not presented with his motion to set aside the default and
was not provided to the master or the Greens prior to the hearing. The
correspondence between the Greens' counsel and CDA included a March 28, 2018
letter stating the Greens' counsel would submit the appropriate demand after
receiving the Greens' medical records, a July 5, 2018 letter that included a
summary of the costs the Greens' incurred from the accident and stated counsel
trusted the insurer "will include values for these factors in [its] determination of a
reasonable settlement figure," and a July 24, 2018 letter that stated he
recommended a settlement of $192,390 to the Greens. Citing McClurg and
Edwards v. Ferguson, 2 Johnson asserted the master erred in finding the insurer had
no standing to challenge the entry of default and that the affidavits presented did
not support his request to set aside the default judgment under Rule 60(b), SCRCP.
He also contended the master erred in finding McClurg barred his argument that a
meritorious defense existed as to damages. Johnson stated that unlike in McClurg,
he preserved his argument regarding a meritorious defense to damages by
including it in his motion to set aside the default and Rule 59(e) motion. He
further asserted that the affidavits he submitted were evidence of a meritorious
defense, citing Williams v. Carpenter.3 Johnson also argued a property
subrogation claim settled the Greens' property damages claims, and therefore the
master erred in awarding $10,000 in property damages.

The Greens argued Johnson's Rule 59(e) motion was improper because it allowed
him to reargue the issues he raised in his motion to set aside the default, and his
only remedy after the master denied that motion was an appeal. They further
argued McClurg did not apply to this case because Johnson failed to present any
evidence of excusable neglect or explanation for his failure to answer the
complaint. The Greens also contended McClurg did not require them to notify
Johnson's insurer that they planned to file a complaint and Johnson had no
meritorious defense to liability. The Greens argued that the subrogation claim did
not represent the full extent of the Greens' property damage and was not the final
settlement of their property damages. The Greens' counsel did not recall if they
assigned their rights to collect on property damages to the insurer when they settled
the subrogation claim.

2
254 S.C. 278, 175 S.E.2d 224 (1970) (finding the circuit court abused its
discretion in failing to set aside the default judgment when the insurer was
involved in ongoing settlement negotiations with a plaintiff but was not informed
that the defendant has been served with a summons and complaint until after the
default judgment was entered).
3
273 S.C. 339, 341, 256 S.E.2d 316, 317 (1979) (finding an affidavit from
defendant's counsel that indicated the existence of a meritorious defense
constituted a prima facie showing of a meritorious defense).
Johnson then argued that although the Greens' counsel did not promise to give the
insurer a copy of the pleadings, he believed that—pursuant to McClurg—the insurer
had a reasonable expectation it would be notified of any lawsuit arising out of the
accident based on the Greens' counsel's conduct in attempting to negotiate a
settlement.

The master requested a proposed order from Johnson and allowed the Greens to
submit a brief on their arguments opposing Johnson's Rule 59(e) motion. The
Greens' counsel submitted a proposed order denying Johnson's Rule 59(e) motion
to the master in lieu of a brief. The proposed order stated "the court rejects the
presentation of new evidence by [Johnson] in his 59(e) motion. [Johnson] cannot
present new issues on a 59(e) that he could have raised prior to judgment but did
not." The Greens' proposed order also stated Johnson's Rule 59(e) motion was
untimely, but even if it were timely, Johnson presented no good cause for failing to
answer the complaint and could not satisfy the requirements to set aside the default
judgment pursuant to Rule 60(b).
Thereafter, the master issued the Amended Damages Order, in which he withdrew
the Damages Order and reduced the Greens award to $250,000. Considering the
evidence presented at the Rule 59(e) motion hearing, the master found Johnson
was entitled relief from default judgment under Rule 60(b)(1) and McClurg. The
master declined to "conclude that [the Greens'] counsel engaged in any intentional
misconduct," and he therefore found relief was not justified for fraud,
misrepresentation, or misconduct under Rule 60(b)(3), SCRCP. The master found
Johnson's appearance in the action within ten days of the default judgment, his
meritorious defense to the damages awarded, and the prejudice Johnson would
suffer from the disproportionate damages award weighed in favor of a reduction of
the damages awarded. The master did not alter his finding that Johnson failed to
present a meritorious defense to liability.

The Greens filed a timely motion to reconsider, which the master denied. This
cross-appeal followed.

THE GREENS' ISSUES ON APPEAL

1. Did the master err in considering Johnson's Rule 59(e), SCRCP motion?
2. Did the master err in considering new evidence presented by Johnson at the
hearing on his Rule 59(e) motion?

3. Did the master misapply McClurg v. Deaton in determining that Johnson had
met the surprise or excusable neglect requirement of Rule 60(b)(1), SCRCP?
JOHNSON'S ISSUES ON APPEAL

1. Did the master err in failing to grant relief from default judgment under Rule
60(b), SCRCP?

2. Did the master err in failing to find Johnson established a meritorious defense to
the damages award?

STANDARD OF REVIEW
"The decision whether to set aside an entry of default or a default judgment
lies solely within the sound discretion of the [circuit court]." Sundown Operating
Co., Inc. v. Intedge Indus., Inc., 383 S.C. 601, 606, 681 S.E.2d 885, 888 (2009).
"The [circuit] court's decision will not be disturbed on appeal absent a clear
showing of an abuse of that discretion." Id. "An abuse of discretion occurs when
the circuit court issuing the order was controlled by some error of law" or when an
order based on factual conclusions is without evidentiary support. Id at 607, 681
S.E.2d at 388.

THE GREEN'S APPEAL
The Greens argue the master erred by reducing the damages award based on
Johnson's Rule 59(e), SCRCP, motion because his motion was untimely.
Specifically, they argue Johnson's Rule 59(e) motion, which was filed November
14, 2019, challenged the Damages Order, which was filed June 5, 2019, instead of
the motion to set aside the default.

We hold the master did not err in considering Johnson's Rule 59(e) motion. See
Sundown Operating Co, 383 S.C. at 608, 681 S.E.2d at 888 ("Once a default
judgment has been entered, a party seeking to be relieved must do so under Rule
60(b), SCRCP."). After the Damages Order was entered on June 5, 2019, Johnson
filed his motion to set aside the default pursuant to Rule 60(b), on June 17, 2019.
See Rule 60(b), SCRCP (stating a motion pursuant to this rule "shall be made
within a reasonable time, and for reasons (1), (2), and (3) not more than one year
after the judgment, order or proceeding was entered or taken."). We find Johnson's
motion to set aside the default was not a motion to reconsider because it relied on
Rule 60(b) rather than Rule 59(e), and argued that the master should set aside
default judgment. Johnson's Rule 59(e) motion requested that the master alter or
amend the order denying his motion to set aside the default judgment. Johnson
filed his Rule 59(e) motion within ten days after the master denied his motion to
set aside the default on November 4, 2019. See Arnold v. State, 309 S.C. 157, 172,
420 S.E.2d 834, 842 (1992) ("The purpose of [a] Rule 59(e), SCRCP, [motion] to
alter or amend the judgment is to request the trial judge to 'reconsider matters
properly encompassed in a decision on the merits.'" (quoting Budinich v. Becton
Dickinson & Co., 486 U.S. 196, 200, (1988))); Rule 59(e) ("A motion to alter or
amend the judgment shall be served not later than [ten] days after receipt of written
notice of the entry of the order."). Therefore, we hold the master did not err in
considering Johnson's Rule 59(e) motion.
The Greens next argue the master's conclusion that Johnson possessed a
meritorious defense as to damages improperly relied on evidence submitted for the
first time at the Rule 59(e) hearing. They maintain the evidence did not constitute
"newly discovered evidence" because it was available to Johnson when he filed his
motion to set aside the default and at the hearing on that motion. We agree.

Initially, we hold the Greens preserved this argument because they presented it to
the master in their proposed order denying Johnson's Rule 59(e) motion, which
they submitted in lieu of a brief opposing the motion. The master rejected their
argument in the Amended Damages Order by considering the evidence Johnson
presented with his Rule 59(e) motion and holding that the evidence supported
granting relief from default judgment. See Eades v. Palmetto Cardiovascular &
Thoracic, PA, 422 S.C. 196, 201 n.3, 810 S.E.2d 848, 850 n.3 (2018) ("In order for
an issue to be preserved for appellate review, the issue must have been timely
raised by the appellant with sufficient specificity and ruled upon by the [circuit]
court.").

We hold the master erred in considering evidence that Johnson presented for the
first time during the hearing on his Rule 59(e) motion. See Spreeuw v. Barker, 385
S.C. 45, 68-69, 682 S.E.2d 843, 855 (Ct. App. 2009) (finding this court could not
consider a document that was submitted to the family court "only as an attachment
to [the father's] Rule 59(e) motion"). All of the evidence Johnson presented at the
Rule 59(e) motion hearing was available and could have been presented when he
filed his motion to set aside the default and default judgment, but Johnson failed to
present any evidence at that time other than the affidavits of Breeann Richardson
and Nikole Shields. Therefore, we hold the master erred in considering the
evidence presented for the first time at the Rule 59(e) hearing when deciding to
grant the motion in part and reduce the damages awarded the Greens in the default
judgment. See also Hickman v. Hickman, 301 S.C. 455, 456, 392 S.E.2d 481, 482
(Ct. App. 1990) ("A party cannot use Rule 59(e) to present to the court an issue the
party could have raised prior to judgment but did not.").
The Greens next argue the master misapplied McClurg when it set aside the default
judgment based on mistake, inadvertence, surprise, or excusable neglect pursuant
to Rule 60(b)(1), SCRCP. They contend the only evidence this court should
consider are the affidavits submitted with his motion to set aside the default. The
Greens contend such affidavits show this case is distinguishable from McClurg
because Johnson's insurers were notified of the claim, the Greens' counsel did not
promise to forward the insurers a copy of the pleadings, and there was no evidence
Johnson attempted to elude the insurers. We agree.
Under Rule 60(b), SCRCP, "On motion and upon such terms as are just, the court
may relieve a party or his legal representative from a final judgment, order, or
proceeding for . . . mistake, inadvertence, surprise, or excusable neglect." "The
movant in a Rule 60(b) motion has the burden of presenting evidence proving the
facts essential to entitle him to relief." Bowers v. Bowers, 304 S.C. 65, 67, 403
S.E.2d 127, 129 (Ct. App. 1991). In determining a motion to set aside a default
judgment under Rule 60(b), the circuit court should consider "(1) the promptness
with which relief is sought, (2) the reasons for the failure to act promptly, (3) the
existence of a meritorious defense, and (4) the prejudice to the other parties."
McClurg, 380 S.C. at 573, 671 S.E.2d at 93.
In particular, our courts have held that in order to obtain
relief from a default judgment under Rule 60(b)(1) . . . ,
not only must the movant make a proper showing he is
entitled to relief based upon one of the specified grounds,
he must also make a prima facie showing of a
meritorious defense.
Id. at 574, 671 S.E.2d at 93.

In McClurg, the plaintiffs in a motor vehicle accident case entered into settlement
negotiations with the insurer of the at-fault driver and his employer, sent the
insurer a draft complaint naming only the employer as a defendant, and offered to
send the insurer a copy of the pleadings if they filed suit. 380 S.C. at 567, 671
S.E.2d at 89. Instead, the plaintiffs brought suit against only the driver, who no
longer worked for the employer, and the insurer was not aware the action was filed
until a default judgment was entered against the driver. Id. at 568-69, 671 S.E.2d
at 90. This court found, "[A]t a minimum, the facts show[ed] the employer] was
taken by surprise when counsel filed the action solely against [the driver] and
failed to inform [the insurer] or [the employer] of this action, thereby meeting the
surprise or excusable neglect requirement under Rule 60(b)(1)." Id. at 573, 671
S.E.2d at 92. The court found the insurer could receive Rule 60(b) relief under
these circumstances, but it ultimately held the insurer was not entitled to relief
because it failed preserve its argument that a defense to damages satisfied the
meritorious defense requirement. Id. at 576, 671 S.E.2d at 94. Thus, the McClurg
court did not consider the question of whether a defense to damages was sufficient
to satisfy the meritorious defense requirement of Rule 60(b). See 395 S.C. at
86-87, 716 S.E.2d at 888 (declining to determine whether a meritorious offense to
damages alone was an adequate basis for the grant of relief under rule 60(b)).
We vacate the master's Amended Damages Order because we hold the master erred
in partially granting Johnson's Rule 59(e) motion. As we stated, we hold the
master erred in considering evidence presented for the first time at the hearing on
Johnson's Rule 59(e) motion in deciding to issue the Amended Damages Order.
See Spreeuw, 385 S.C. at 68-69, 682 S.E.2d at 855 (finding this court could not
consider a document that was submitted to the family court "only as an attachment
to [the father's] Rule 59(e) motion"). We hold the affidavits Johnson presented
with his motion to set aside the default and default judgment did not show the
insurer reasonably believed any suit filed would include the employer as a
defendant or that the Greens' counsel would provide it with a copy of any pleading
filed. The affidavits stated the Greens' counsel spoke with CDA, provided CDA a
video of the accident, and engaged in some settlement negotiations, including
making a settlement demand. Simply put, the evidence that Johnson properly
presented did not show that the insurer was taken by surprise when the Greens'
filed the action solely against Johnson without informing the insurer. Cf. McClurg,
380 S.C. at 573, 671 S.E.2d at 92 (finding the plaintiffs had a responsibility to
inform the insurer of the filing of an action against the at-fault driver when the
plaintiffs entered into settlement negotiations with the insurer, sent the insurer a
draft complaint naming only the employer as a defendant, and offered to send the
insurer a copy of the pleadings if they filed suit).
Further, we hold the explanations Johnson supplied for his failure to answer the
original complaint did not constitute mistake, inadvertence, surprise, or excusable
neglect under Rule 60(b)(1). See Rule 60(b), SCRCP ("[T[he court may relieve a
party or his legal representative from a final judgment, order, or proceeding
for . . . mistake, inadvertence, surprise, or excusable neglect."). The affidavits
stated Johnson had undergone open heart surgery in November 2018 that prevented
him from working, and that he was diagnosed with diabetes in June 2019. These
explanations do not justify setting aside the default judgment because he was
served with the complaint at his mother's home where he lived, not at his place of
work, and his diabetes diagnosis occurred after the May 2019 damages hearing.4
Accordingly, we hold Johnson failed to meet the surprise or excusable neglect
requirement under Rule 60(b)(1).

Because Johnson failed to prove he was entitled to relief from default judgment
based upon excusable neglect under Rule 60(b)(1), we need not reach the issue of a
meritorious defense. See ITC Com. Funding, LLC v. Crerar, 393 S.C. 487, 496,
713 S.E.2d 335, 339-40 (Ct. App. 2011) (stating once this court "concluded the
trial court did not abuse its discretion in finding the Appellant was not entitled to
relief on any of the grounds specified in Rule 60(b), SCRCP, we need not address
whether the Appellant has a meritorious defense"); see also Futch v. McAllister
Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999)
(holding an appellate court need not review remaining issues when its
determination of a prior issue is dispositive of the appeal).

For the forgoing reasons, we hold Johnson failed to present evidence showing he
was entitled to relief under Rule 60(b), SCRCP. Accordingly, we affirm the
Master's denial of Johnson's motion to set aside the default and vacate the
Amended Damages Order.
JOHNSON'S APPEAL

Johnson argues the master erred in failing to grant him relief from default
judgment under Rule 60(b)(3), SCRCP, based on the Greens' counsel's
misrepresentations to the insurer. Johnson also argues the master erred in failing to
grant relief from default judgment under Rule 60(b)(1), SCRCP when the Greens'
counsel's conduct resulted in surprise or excusable neglect. Finally, Johnson
contends the master erred in failing to set aside default judgment after he provided
evidence that the property damages awarded to the Greens in the Damages Order
had previously been released by the Greens through their insurer in a property
subrogation agreement.

We hold the master could not consider the evidence presented for the first time at
the hearing on Johnson's Rule 59(e) motion when determining whether to grant
the59(e) motion, and the affidavits Johnson submitted to support his motion to set
aside the default did not support setting aside default judgment under Rule 60(b).
See Spreeuw, 385 S.C. at 68-69, 682 S.E.2d at 855 (finding this court could not

4
Moreover, Johnson did not file his own affidavit supporting the motion to set
aside the entry of default or explaining how his health issues affected his ability to
file an answer to the complaint.
consider a document that was submitted to the family court "only as an attachment
to [the father's] Rule 59(e) motion"). Therefore, we hold the master did not err in
denying Johnson relief under Rule 60(b)(1), 60(b)(3), 60(b)(5), or based upon his
argument that the property claim had been settled by the subrogation claim because
he did not present evidence supporting these arguments when he initially
challenged the entry of default and default judgment.
Johnson next argues the master erred in failing to grant relief from default
judgment when he established a meritorious defense to the damages awarded.
Because Johnson failed to prove he was entitled to relief under Rule 60(b), this
court need not reach the issue of whether Johnson presented a meritorious defense
to the damages. See Crerar, 393 S.C. at 496, 713 S.E.2d at 339-40 (stating once
this court "concluded the trial court did not abuse its discretion in finding the
Appellant was not entitled to relief on any of the grounds specified in Rule 60(b),
SCRCP, we need not address whether the Appellant has a meritorious defense");
see also Futch, 335 S.C. at 613, 518 S.E.2d at 598 (holding an appellate court need
not review remaining issues when its determination of a prior issue is dispositive of
the appeal).

CONCLUSION
Based on the foregoing, we affirm the master's denial of Johnson's motion to set
aside the default and default judgment and vacate the Amended Damages Order.

AFFIRMED IN PART AND VACATED IN PART.

MCDONALD and VINSON, JJ., and LOCKEMY, A.J., concur.