Whitlock v. Stewart Title Guaranty Company

Filing 72

ORDER denying 62 Motion to Amend/Correct; granting in part and denying in part 35 Motion in Limine. Signed by Honorable R Bryan Harwell on 12/11/2012.(hcic, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION

Joetta P. Whitlock, Trustee of the
Joetta P. Whitlock Trust,

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)
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Plaintiff,
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vs.
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Stewart Title Guaranty Company,
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Defendant.
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____________________________________)

Civil Action No.: 4:10-cv-01992-RBH

ORDER

This action was removed to this Court on July 30, 2010. On May 2, 2011, Defendant
Stewart Title Guaranty Company filed a Motion for Summary Judgment (ECF No. 15) as to liability
and, in the alternative, for partial summary judgment as to the applicable date for determining
damages. On July 7, 2011, Plaintiff filed a cross motion for summary judgment as to liability only.
After hearing arguments, this Court granted the plaintiff’s motion for summary judgment as to
liability and denied the defendant’s motion regarding liability. (ECF No. 49). It reserved ruling on
the defendant’s Motion for Summary Judgment insofar as it related to damages and the date of the
valuation of the actual loss suffered by the insured because the court was certifying a question to the
South Carolina Supreme Court. The Court also took the defendant’s motion in limine [ECF No.
35] under advisement and stayed the case. On September 12, 2012, the South Carolina Supreme
Court answered the certified question and held that the valuation date was the date of purchase of
the property rather than the date of discovery of the defect, on the basis that ambiguities in
insurance policies should be construed in favor of the insured. The state court denied the
defendant’s petition for rehearing on October 17, 2012. This Court then lifted the stay and issued

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an order pursuant to Fed. R. Civ. P. 56(f), requiring the parties to brief the issue of whether
summary judgment in favor of the plaintiff on the issue of damages in the amount of the purchase
price of the property ($410,000.00) might be appropriate. (ECF No. 67). Both parties filed
responses to this order. On November 8, 2012, Plaintiff filed a motion to amend her complaint to
add a bad faith claim. Defendant filed a response in opposition to the motion, and Plaintiff filed a
Reply.
Summary Judgment Issues
After reviewing the briefing by the parties in response to this Court’s sua sponte order
pursuant to Fed. R. Civ. P. 56(f), this Court has determined that it is not appropriate to grant
Plaintiff judgment independent of a motion. The Court finds there are genuine issues of material
fact as to the value of the property with and without the spoilage easement as of the date of
purchase. See Stanley v. Atlantic Title Ins. Co., 377 S.E.2d 405, 661 S.E.2d 62 (2008).1
In its order entered on October 3, 2011 (ECF No. 49), this Court reserved ruling on the issue
raised by the defendant regarding the valuation date for damages purposes. Now that the Supreme
Court has answered the certified question as set forth above, the Court denies the defendant’s
motion as it relates to damages.

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Plaintiff’s counsel has asserted in her response that the Court should exclude the second
appraisal of Defendant’s appraiser as beyond the deadlines set forth in the scheduling order. (The
defendant’s expert witness deadline was December 2, 2010, and the discovery deadline was June 11,
2011.) Plaintiff also requests the Court to allow her to obtain an expert appraiser if the defendant’s new
expert report is allowed. The Court is not inclined to allow either side to now conduct additional expert
discovery or to submit any additional expert reports. Both sides have known about the potential issues,
including the valuation date, and could have secured an expert opinion regarding the value of the
property with and without the spoilage easement on both the date of purchase and the date of discovery.
No good cause has been shown to reopen the expert period or to modify the deadlines concerning
experts.
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Defendant’s Motion in Limine (ECF No. 35)
Defendant’s motion in limine seeks to exclude the testimony of the plaintiff, Joetta P.
Whitlock, on the issue of the difference in value of the property with and without the spoilage
easement. It also seeks to exclude the entire testimony of William W. Deschamps, Jr., Esquire.
First, in regard to the testimony of the plaintiff, Rule 702 of the Federal Rules of Evidence
includes “landowners testifying to land values” as experts. See Advisory Committee Notes to 1972
proposed rules. Plaintiff’s testimony should be allowed assuming she lays a proper foundation.
The defendant can cross-examine her, and the jury can then determine the weight of her testimony.
See Glendale LLC v. AMCO Ins. Co., No. 3:11-cv-3-RJC-DCK, 2012 WL 3025122, at *1
(W.D.N.C. July 24, 2012), citing United States v. Sherrill, 626 F.Supp.2d 1267, 1270 n.1 (M.D.Ga.
2009) (citing United States v. 68.94 Acres of Land, 918 F.2d 389, 397 (3rd Cir. 1990))(“The Federal
Rules of Evidence generally permit landowners to give opinion evidence as to the value of their
land due to the special knowledge of property which is presumed to arise out of ownership.”)
The plaintiff presents the testimony of Attorney Deschamps as an expert on real estate legal
malpractice matters and as to the presence of the spoilage easement in the county real estate
records. Additionally, Plaintiff submitted this witness to give an opinion as to the appropriate date
of loss. Considering that the South Carolina Supreme Court has answered this Court’s question
regarding the date of loss, an expert witness would not be allowed to testify as to the date of loss.
See Adalman v. Baker, Watts & Co., 807 F.2d 359, 366 (4th Cir. 1986)(It is the court’s duty to
explain the law to the jury.) The Court will, however, allow this witness to testify as to the step-by
step practices and procedures followed by title insurance companies, the handling of claims, and his

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examination of the title showing the presence of the spoilage easement on the property.2
Motion to Amend (ECF No. 62)
On November 8, 2012, the plaintiff filed a Motion to Amend to add a claim for bad faith
refusal to pay insurance benefits. (ECF No. 62). Defendant filed a response in opposition to the
motion, and Plaintiff filed a Reply. After review of the arguments by the parties, the Court denies
the plaintiff’s motion. The deadline contained in this Court’s scheduling order for amended
pleadings was October 4, 2010. Fed. R. Civ. P. 16(b)(4) provides that a court’s scheduling order
“may be modified only for good cause and with the judge’s consent.” After the deadlines set forth
in a scheduling order have passed, the good cause standard of Rule 16 must be satisfied instead of
the “when justice requires” requirement of Rule 15. Nourison Rug Corp. v. Parvizian, 535 F.3d
295 (4th Cir. 2008). The “good cause” requirement of Rule 16(b)(4) is unlike the more lenient
standard of Rule 15(a) in that it does not focus on the bad faith of the movant or the prejudice to the
opposing party but rather the diligence of the party seeking the amendment. Dilmar Oil Co., Inc. v.
Federated Mut. Ins. Co., 986 F.Supp. 959, 980 (D.S.C. 1997). “Good cause” means that scheduling
order deadlines cannot be met despite a party’s diligent efforts. Id. (Citing 6A Wright, Miller &
Kane, Federal Practice and Procedure § 1522.1 at 231 (2d ed. 1990)); see also Advisory
Committee’s note to 1983 amendments to Rule 16.
Plaintiff cites as a basis for her bad faith claim this Court’s grant of summary judgment on
the issue of liability which dealt with the defendant’s affirmative defense based on exclusion
number 1. However, although the court did not grant summary judgment on the issue until October

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In light of the state Supreme Court’s ruling as to the date to be used for valuation of the loss,
it is u nclear whether Plaintiff still intends to use this witness and for what purpose. Defendant may
be willing to stipulate that the spoilage easement affects the property.
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of 2011, the defendant’s amended answer had asserted the exclusion as an affirmative defense early
in the case. Additionally, the plaintiff did not seek any discovery regarding the claims
administration process or the assertion of the exclusion as a defense. This case should be ready for
trial. If the Court allowed the amendment, then further discovery would be required and the issues
in the case would be expanded. Further, it would appear that any bad faith claim would be futile in
light of the dissent by Justice Pleicones to the certification opinion by the South Carolina Supreme
Court, which agreed with the defendant regarding the valuation date. If there are reasonable
grounds for contesting a claim, then there is no bad faith denial of benefits. Mixson, Inc. v. Am.
Loyalty Ins. Co., 349 S.C. 394, 562 S.E.2d 659 (Ct. App. 2002). The plaintiff’s motion to amend is
accordingly denied.
CONCLUSION
The plaintiff’s [62] motion to amend complaint is DENIED. The defendant’s [35] motion in
limine is GRANTED IN PART AND DENIED IN PART. Further, there are genuine issues of material
fact as to the value of the property with and without the spoilage easement as of the date of purchase,
and summary judgment is not appropriate.
Jury selection in the case shall be scheduled for January 10, 2013. The parties should re-submit
their requests to charge and pretrial briefs reflecting the Supreme Court’s answer to the certified
question no later than January 3, 2013.
IT IS SO ORDERED.
s/ R. Bryan Harwell
R. Bryan Harwell
United States District Court Judge
December 11, 2012
Florence, South Carolina

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