Smith v. Business Development Corporation et al

Filing 50

ORDER adopting Report and Recommendations re 45 Report and Recommendations.; denying 29 Motion for Summary Judgment by plaintiff Charlotte Ann Smith; granting 4 Motion to Dismiss by defendant Business Development Corporation, Certified Developme nt Corporation; granting 7 Motion to Dismiss for Lack of Jurisdiction by defendant US Small Business Administration; and denying 49 Motion for Extension of Time by plaintiff Charlotte Ann Smith; Signed by Honorable Joseph F Anderson, Jr on 9/16/10.(mflo, )

S m i t h v. Business Development Corporation et al

D o c . 50

IN THE UNITED STATES DISTRICT COURT F O R THE DISTRICT OF SOUTH CAROLINA R O C K HILL DIVISION C h a rlo tte Ann Smith, P l a in tif f , vs. B u s in e ss Development Corporation, C e rtif ie d Development Corporation, B ra n c h Bank and Trust, U S Small Business Administration, D e f e n d a n ts . ) ) ) ) ) ) ) ) ) ) ) ) ) C /A No.: 0:10-61-JFA-JRM

ORDER

T h r o u g h this action, the pro se plaintiff Charlotte Ann Smith filed suit against defendants Business Development Corporation ("BDC"), Certified Development Corporation (" C D C " ), Branch Bank and Trust ("BB&T"), and the US Small Business Administration (" S B A " ) in the Court of Common Pleas in York County, South Carolina.1 Defendant SBA re m o v e d the case to this Court on January 8, 2010. This matter is before the Court for review of the Magistrate Judge's Report and R e c o m m e n d a tio n (the "Report") on Defendants' motions to dismiss and Plaintiff's motion f o r summary judgment made in accordance with 28 U.S.C. § 636(b)(1)(A) and (B) and Local R u le 73.02(B)(2)(g) (D.S.C.). T h e magistrate judge makes only a recommendation to the Court, to which any

For pretrial purposes, the Magistrate consolidated this case with a companion case filed by the pro se plaintiff Mary Joe Moore because the defendants and allegations are identical except that Plaintiff Smith has one additional cause of action.

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p a rty may file written objections . . . . The Court is not bound by the re c o m m e n d a tio n of the magistrate judge but, instead, retains responsibility for th e final determination. The Court is required to make a de novo d e te rm in a tio n of those portions of the report or specified findings or re c o m m e n d a tio n as to which an objection is made. However, the Court is not re q u ire d to review, under a de novo or any other standard, the factual or legal c o n c l u s io n s of the magistrate judge as to those portions of the report and re c o m m e n d a tio n to which no objections are addressed. While the level of s c ru tin y entailed by the Court's review of the Report thus depends on whether o r not objections have been filed, in either case the Court is free, after review, to accept, reject, or modify any of the magistrate judge's findings or r e c o m m e n d a tio n s . W a lla c e v. Housing Auth. of the City of Columbia, 791 F. Supp. 137, 138 (D.S.C. 1992) (c ita tio n s omitted). The Court advised the plaintiff in a Roseboro order of the importance o f her adequate response to the motions. Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975). T h e plaintiff filed responses to the motions. The Report recommends granting the motions to dismiss filed by SBA, BB&T, and B D C /C D C and denying the motion for summary judgment filed by the plaintiff. Plaintiff filed objections to the Report on September 13, 2010. (ECF No. 48.) I. F a c tu a l and Procedural Background T h e allegations in the complaint are all related to a real estate foreclosure action that to o k place in York County, South Carolina, Business Dev. Corp. of S.C. v. Fort Mill A c a d e m y, LLC, et al., C/A No. 2006-CP-46-2085. The facts, taken in the light most f a v o r a b le to the plaintiff and as recited in the Magistrate's Report, are as follows: 1 . It appears that in January of 1997, Plaintiffs sold a child daycare business, F o r t Mill Academy, LLC ("FMA") and the real estate upon which it was lo c a te d to Betty Brindle. BDC financed the transaction by lending FMA 2

$ 3 4 5 ,0 0 0 secured by the real estate upon which FMA was located. Brindle also sec u red the loan with a mortgage on her residence to BDC. (BDC, 6). 2 . "BDC is a South Carolina business development corporation whose purpose is to promote the economic development in South Carolina by assisting small b u s in e ss e s primarily by providing these businesses a source for commercial loan s not usually undertaken by traditional lending institution." (Beck Aff.). 3 . The United States of America, through the Small Business Administration ("S B A ") guaranteed 75% of the BDC loan to FMA. (Grimes Aff.). 4 . Branch Bank & Trust Company of South Carolina ("BB&T") purchased the S B A guaranteed portion of the loan from BDC. Id. 5 . In December of 2002, BDC repurchased the guaranteed portion of the loan f ro m BB&T. Id. 6 . On May 5, 2004, Smith and Moore assumed "the BDC loan and all in stru m e n ts evidencing and securing the BDC loan and agreed to perform all o b lig a tio n s and undertakings...existing or arising under the Note and BDC L o a n Documents." (BDC, 6). FMA, CSM, Inc. and Brindle remained liable a n d obligated to BDC. Id. 7 . The loan went into default as of January 1, 2006. Id. 8 . The foreclosure action was filed on August 10, 2006. FMA, Smith, Moore, B rin d le and others were named defendants. Id. 9 . Smith and Moore filed an Amended Answer and Counterclaim through co u n sel, Adam Fisher, Jr., Esquire and Leroy J. Dubre', Esquire, on February 7 , 2007. The counterclaims alleged tortious interference with contractual re la tio n s h ip and a violation of the South Carolina Unfair Trade Practices Act ("S C U T P A "). (BDC, 3). 1 0 . Forest Craig Wilkerson, Jr., Esquire ("Wilkerson") was appointed Special R ef ere e pursuant to the South Carolina Rules of Civil Procedure by the Clerk o f Court. (BDC, 2). 1 1 . At a hearing on December 13, 2007, counsel for Smith and Moore v o lu n ta rily dismissed the counterclaim for tortious interference with prejudice. 3

(B D C , 4). 1 2 . The trial proceeded on April 30, 2008. Wilkerson filed an "Order and Ju d g m e n t of Foreclosure and Sale" on June 9, 2008. The order specifically fo u n d that BDC had not violated the SCUTPA. (BDC, 6). 1 3 . Counsel for Smith and Moore withdrew and on July 2, 2008 Smith filed p ro se motions. One sought recusal of BDC's attorney, Sherwood M. C le v e la n d ("Cleveland") because he had an alleged conflict of interest and he " m a d e damaging remarks that influenced witnesses, not to testify to all the f a cts (play it dumb, play it without memory)." The other motion sought recusal o f Wilkerson due to an alleged conflict of interest and a new trial. (BDC, 7). 1 4 . The motions were denied after a hearing held on July 8, 2008. (BDC, 8). 1 5 . Smith filed a pro se notice of appeal. (BDC, 9). 1 6 . The appeal was dismissed by the South Carolina Court of Appeals due to S m ith 's failure to comply with the South Carolina Rules of Appellate P roc ed u re. (BDC, 10). (R e p o rt, ECF No. 45.) Plaintiff then filed this action in state court, and the defendant SBA re m o v e d it to this Court. II. D is c u s s io n D e f e n d a n t SBA filed a motion to dismiss the eighth cause of action, the only claim a g a in s t SBA, under Rule 12(b)(1) for lack of jurisdiction. Because the plaintiff never filed a n administrative claim with the SBA as required under 28 U.S.C. § 2675(a), the Magistrate r e c o m m e n d s granting this motion. This Court agrees. D e f e n d a n t BB&T filed a motion to dismiss the seventh cause of action under Rule 1 2 ( b ) ( 6 ) for failing to state a claim upon which relief can be granted. However, the M a g is tra te chose to construe the motion as a motion for summary judgment under Rule 56 4

b e c au s e the parties presented arguments outside the pleadings. The Magistrate found nothing to show that BB&T acted as the plaintiff's agent and that BB&T had no connection to the lo a n at issue after 2002. Therefore, the Magistrate recommends granting this motion, and th i s Court agrees. T h e complaint contains several claims against defendant BDC and one against d e f en d a n t CDC. BDC and CDC filed a joint motion to dismiss. The Magistrate recommends g ra n tin g the motion as to several of the claims against BDC because they are barred by res ju d ic a ta and collateral estoppel. To show res judicata, a defendant must prove three e le m e n ts : the identity of the parties, the identity of the subject matter, and adjudication of the is s u e in a former suit. Riedman Corp. v. Greenville Steel Structures, Inc., 308 S.C. 467 (1 9 9 2 ). The Magistrate concluded that the first, second, third, fourth, fifth, sixth, tenth, tw e lf th , and thirteenth causes of action should be dismissed under res judicata. First, BDC is able to establish the identity of the parties because the plaintiff and BDC were both parties to the foreclosure action. Secondly, the note and mortgage are the subject matter of the f o re c lo s u re action and the instant case. Finally, all of the plaintiff's claims either were or s h o u ld have been litigated in the foreclosure action. The plaintiff's objections center around the Magistrate's findings on this issue. S p e c if ic a lly, the plaintiff argues that "[t]his foreclosure action was never moved to Federal C o u rt and was litigated as a foreclosure in York County, South Carolina." (ECF No. 48.)

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T h is Court agrees with the Magistrate that the plaintiff's claims either were or should have b e e n litigated during the foreclosure action and that they should now be dismissed. T h e Magistrate recommends that the negligence claim against CDC (ninth cause of a c tio n ) and Plaintiff Smith's claim that BDC threatened her life (fourteenth cause of action) b e dismissed under Rule 8, which requires that a complaint contain "a short and plain statem en t of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). E v e n when given a liberal construction as a pro se complaint, these claims are bare assertions w ith a total lack of factual support. This Court agrees with the Magistrate that they should b e dismissed. The Magistrate did not make any specific findings as to the eleventh cause of action, w h ic h alleges that BDC representatives perjured themselves. However, after reviewing the re c o rd , the Court finds that the same Rule 8 analysis applies to this claim. The plaintiff has f a ile d to show any facts in support of this allegation. The Magistrate found that the plaintiff's motion for summary judgment is essentially a restatement of her complaint and should be denied. In her objections to the Report, the p lain tiff reiterates the allegations, specifically that the defendants used racially and sexually d is c rim in a to ry language. However, she has not supplied any material facts to support her c laim s. This Court agrees with the Magistrate that the plaintiff has not met the requirements o f Rule 56, and summary judgment should be denied. The remainder of the plaintiff's objections elaborate upon claims raised in the

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co m p lain t, particularly conspiracy to defraud. Finding no merit to these objections, they are o v e rru le d . III. C o n c lu s io n A f te r reviewing the parties' briefs, the record, the Report, and the objections thereto, th e Court hereby adopts the Report in full, and grants the motions to dismiss of SBA, BB&T, a n d BDC/CDC and denies the plaintiff's motion for summary judgment. Further, the p lain tiff included in her objections a motion to extend the deadline within which to file a d d itio n a l objections. This motion is denied. This case is now ended. IT IS SO ORDERED.

S ep tem b er 16, 2010 C o lu m b ia , South Carolina

J o s e p h F. Anderson, Jr. U n ite d States District Judge

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