Mace v. Chevy Chase Bank

Mace v. Chevy Chase Bank THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR. THE STATE OF SOUTH CAROLINA In The Court of Appeals Marcum Mace, Respondent, v. Chevy Chase Bank, Appellant. Appeal From Spartanburg County Larry R. Patterson, Circuit Court Judge Unpublished Opinion No. 2004-UP-643 Heard November 16, 2004 – Filed December 20, 2004 AFFIRMED Rivers S. Stilwell and Peter G. Siachos, both of Greenville, for Appellant. Joseph A. Mooneyham, of Greenville, for Respondent. PER CURIAM: Chevy Chase Bank appeals a circuit court order enforcing a settlement agreement entered into between it and Marcum Mace. We affirm. FACTS In September 1996, Marcum Mace obtained a second mortgage to finance construction of a residential swimming pool. Payments were not to be made on the mortgage until construction of the swimming pool was completed and the last payment given to the pool contractor. Before construction was complete, Chevy Chase Bank acquired the mortgage and began to prematurely assess interest and penalties on the loan. Mace filed suit against the Bank, seeking return of the mistaken penalties and interest and correction of his credit history. The parties held mediation after considerable written discovery was taken, including Mace’s credit report, and on September 11, 2001, they entered into a written settlement agreement. The Bank agreed to pay Mace $20,000 and to refinance the principal loan on his home. The agreement provided the refinancing was “contingent upon the submission and approval of an application by Mace.” Mace and a representative of the Bank, as well as both attorneys, signed the agreement, but it was neither filed with the court nor entered into the record. In November 2001, the Bank paid the agreed upon $20,000 and sent Mace a credit application. Mace completed the application and returned it to the Bank, but it was rejected because Mace used a pencil. A second application, completed with a pen, was sent to the Bank on December 18, 2001. No action was taken on this application until it was rejected in February 2002 based on a negative credit history. In August 2002, Mace commenced the current litigation by filing a motion to compel settlement. At the hearing, Mace argued the Bank improperly refused to refinance his home loan. Specifically, Mace asserted the credit report given to the Bank at the time the settlement took place showed no substantial negative credit history. Although he acknowledged his credit report did contain negative history by the time the Bank took action on the application, Mace asserted the negative history occurred as Mace “allowed some things to go a little bit late because he anticipated the refinance and having additional funds with which to resolve some credit card bills.” Mace argued the settlement contemplated approval for the refinancing at the time of settlement, not five months later. The Bank presented two reasons why the settlement should not be enforced. First, the Bank argued Rule 43(k), SCRCP, specifically applied to the settlement, and because the settlement was not filed with the court nor entered into the record, it was not enforceable. Alternatively, the Bank asserted the condition precedent to the refinancing—submission and approval of an application—was not met. The Bank averred it considered Mace’s application, but was just unable to approve it because of the negative credit history. On May 6, 2003, the circuit court issued an order granting the motion to compel settlement. The court ruled that Rule 43(k) did not apply to the settlement agreement, and the Bank could not, by its own delay, prejudice Mace’s application. Accordingly, the court ordered the Bank to grant the refinancing. The Bank argues on appeal these rulings were in error. STANDARD OF REVIEW An action to determine liability under a settlement agreement is an action at law. Pruitt v. South Carolina Medical Malpractice Liability Joint Underwriting Ass’n, 343 S.C. 335, 339, 540 S.E.2d 843, 845 (2001). “[I]n an action at law, on appeal of a case tried without a jury, the findings of fact of the judge will not be disturbed upon appeal unless found to be without evidence which reasonably supports the judge’s findings.” Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976). LAW/ANALYSIS The Bank first asserts the circuit court erred in finding Rule 43(k), SCRCP, did not prevent enforcement of the settlement agreement. We disagree. Rule 43(k), SCRCP provides: “[n]o agreement between counsel affecting the proceedings in an action shall be binding unless reduced to the form of a consent order or written stipulation signed by counsel and entered in the record, or unless made in open court and noted upon the record.” The Bank argues this rule applies and therefore, the settlement agreement is unenforceable because it was neither entered into the record nor filed with the court. While it is true the actual agreement was not entered into the record, the Bank admitted there was an agreement. Following a comment by the trial judge that there was no question the parties entered into an agreement, the Bank responded, “[s]ure, Your Honor, and we don’t contend that this isn’t a binding settlement by any means.” A short time later, the Bank again admitted the agreement’s existence when it explained, “[w]e’re not trying to get out of, of the settlement agreement here, Your Honor.” Because, Rule 43(k) does not apply when an agreement is admitted or has been carried into effect, it does not render this settlement unenforceable. See Ashfort Corp. v. Palmetto Constr. Group, Inc., 318 S.C. 492, 494 n.1, 458 S.E.2d 533, 534 n.1 (1995). The Bank also contends the circuit court erred in failing to rule that a condition precedent to the refinancing had not been fulfilled and in ruling that the Bank unreasonably delayed examining Mace’s application. Again, we disagree. South Carolina case law defines a condition precedent as “any fact other than the lapse of time, which, unless excused, must exist or occur before a duty of immediate performance arises.” Worley v. Yarborough Ford, Inc., 317 S.C. 206, 210, 452 S.E.2d 622, 624 (Ct. App. 1994). Even assuming a condition precedent exists, the change in Mace’s credit history occurred during the delay between the settlement and loan approval. The circuit court found the Bank caused the delay, and it would be improper to allow the Bank to gain from its wrongdoing. Furthermore, included in every contract, including settlement agreements, is an implied covenant of fair dealing. See Boddie-Noell Properties, Inc. v. 42 Magnolia P’ship, 344 S.C. 474, 484, 544 S.E.2d 279, 284 (Ct. App. 2000); see also Allen v. Allen, 301 S.E.2d 514, 515-16 (N.C. Ct. App. 1983). In this case, the court found the Bank’s unreasonable delay prejudiced Mace’s application. It took over two months from the settlement date for the Bank to provide Mace with an application. Although Mace improperly completed the first application in pencil, he sent the Bank a proper application on December 18, 2001. The Bank took no action on this application for nearly two months until it was denied based on Mace’s credit history sometime after February 11, 2002. Counsel for the Bank conceded that what amounted to a five-month delay between settlement and denial of the loan application was unusual, but instead insisted there was no evidence the Bank deliberately delayed reviewing the application. While it is difficult to reconstruct the exact reasons for the delay, we find there is ample evidence to support the court’s determination that the Bank unreasonably delayed processing Mace’s application. CONCLUSION For the reasons discussed above, the circuit court’s order is AFFIRMED. HEARN, C.J., SHORT and WILLIAMS, JJ., concur.