In The Court of Appeals

Brenda R. Babb, Appellant,


The Estate of Charles L. Watson, and Eleanor G. Watson and Pamela Watson Fehlig, as Personal Representatives of the Estate of Charles L. Watson, and CLW Investments, Inc., d/b/a Salt Marsh Cove, and Wilbur M. McLamb, individually, Little River Campground, Inc., and Carl Meares, individually, Respondents.

Appeal from Charleston County
Daniel F. Pieper, Circuit Court Judge

Unpublished No. 2008-UP-247
Submitted May 1, 2008 – Filed May 2, 2008


Brenda R. Babb, of Calabash, North Carolina, pro se, Appellant.

Stephen V. Futeral, of Mount Pleasant, for Respondents.

PER CURIAM:  Brenda R. Babb (Babb) appeals the circuit court’s order for the Respondents arguing (1) the statute of limitations expired before their declaratory judgment counterclaim was filed, (2) the counterclaim did not relate back to the date of the original pleadings, and (3) the circuit court erred in ruling on the Respondents’ waiver defense because it had been disposed of prior to trial by summary judgment.  We affirm.[1]


At an auction conducted by the United States Marshals Service in June 1991, Babb, Charles Watson, and Carl Meares submitted a successful bid of $400,000 for an 8.4 acre parcel of land known as Little River Campground (the Campground) in Horry County, South Carolina.  Babb, Watson and Meares each paid $25,000 earnest money to hold their interest, leaving a balance of $375,000.  The parties agreed to form a corporation in which the Campground would be the corporation’s asset.  Babb, Watson and Meares would be shareholders with a one-third interest in the corporation.  In August, 1991, the parties filed articles of incorporation for Little River Campground Incorporated (LRCI).  Babb’s husband, Mac Babb, was appointed president and Watson was Secretary and Treasurer.  In April 1995, Watson issued three LCRI stock certificates, one to each party, and mailed them to Mac Babb for his signature as president.  Babb is in possession of her stock certificate though the parties contest whether the certificates were ever satisfactorily signed and delivered before closing. 

Due to environmental cleanup efforts, the sale of the property was not closed until December 6, 1995, at which time Babb, Watson and Meares each paid $125,000.  Prior to closing, however, Babb instructed the closing attorney, John Martini (Martini), to deed to her a one-third undivided interest in the 8.4 acres.  It is undisputed that upon closing, LRCI was deeded a two-third undivided interest in the property and Babb was deeded an undivided interest in one-third. 

Babb contended that she became aware that 4.2 acres of land adjacent to the Campground was available for purchase.  In amended pleadings, she stated the parties discussed forming a new corporation in which to title this new acreage and any subsequently acquired real property.  The parties concede the acreage was purchased and titled to CLW Investments, a real estate investment company operated by respondents Watson and McLamb. 

On June 24, 1997, Babb commenced a derivative suit against Watson, and McLamb concerning the purchase.[2]  Respondents answered with general denials.  Babb filed an amended complaint on August 10, 1998, naming as plaintiffs LRCI; Mac Babb, as an officer and director of LRCI; and herself individually and as a shareholder.  The case was stricken from the roster pursuant to Rule 40(j), SCRCP, but restored by motion in May 1999.  Respondents filed an amended answer in April 2001.  This answer provided in part:

2. To the extent that Plaintiff’s Complaint infers that Plaintiff Brenda Babb is shareholder in Little River Campground, Inc., such allegation is denied and strict proof is demanded thereof.

In addition to general admissions and denials, the answer asserted no agreement was reached concerning the purchase of the adjacent property.  It asserted the defenses of unclean hands, waiver by Babb of any legal or equitable interest in LRCI, and laches.  The answer additionally requested a 12(b)(6) dismissal.  Pursuant to Respondents’ motion, LRCI and Mac Babb were dismissed from the case on May 25, 2001. 

In June 2001, Respondents filed and served an amended answer that included a counterclaim for slander of title.  A reply to the amended answer and counterclaim was filed July 26, 2001.  Regarding the counterclaim, Babb claimed Respondents failed to bring the counterclaim within the applicable statute of limitations, and asserted the additional defense of laches.

Respondents moved to transfer the suit to the non-jury roster and requested that any equitable shareholder’s claim should be resolved prior to a jury trial on any remaining issues.  The order was granted with the circuit court finding:

1)   The gravamen of Plaintiff’s complaint is a shareholder’s derivative suit filed on behalf of Little River Campground, Inc. against Defendants alleging they usurped a corporate opportunity….
2) That many, if not all, of the other claims asserted by Plaintiffs have, as their basis, a claim that Defendants were alleged required to acquire land on behalf of Little River Campground, Inc. and that Defendants usurped a corporate opportunity;

On July 26, 2002, Babb filed an amended reply to Respondents’ second amended answer and counterclaim.  In addition to a general denial, Babb reiterated the statute of limitations and laches defenses. 

The circuit court in Charleston County, on June 18, 2003, addressed several motions filed by the parties.  Relevant to this appeal, Babb’s motion to amend and dismiss her claims as a shareholder in LRCI was granted. 

Babb moved for summary judgment on Respondents’ slander of title counterclaim and the defenses of unclean hands and waiver.  By an order filed December 29, 2003, summary judgment was granted to Babb on the slander of title counterclaim.  The circuit court acknowledged Babb’s claims as a shareholder had been dismissed at her request.  The court stated:

Because her damage claims as a shareholder have been dismissed, defendants’ affirmative defenses as to those claims should likewise be dismissed.  Therefore, plaintiff is hereby granted summary judgment on defendants’ defenses of unclean hands and waiver.

(emphasis added).

Respondents moved for a third amended answer and counterclaim in December 2003.   The answer added LRCI and shareholder Carl Meares as parties.  It repeated the same general admissions and denials contained in previous answers.  Pertinent to this appeal, as a defense and by way of a counterclaim, Respondents raised a declaratory judgment action.  In support, Respondents contend they are entitled to a court order declaring Babb (1) waived any legal or equitable interest in LRCI by request and receipt of an undivided one-third interest; (2) is barred from claiming interest by the unclean hands doctrine; and (3) is not a shareholder in LRCI. 

The circuit court granted Respondents’ motion to amend the answer and counterclaim and add parties on January 5, 2004.  The order stated:

[I]t appears that the matters which Defendants seek to raise by amendment are matters which have been litigated by these parties for the past several years this action has been pending.  Under these circumstances, Plaintiff is not prejudiced by such amendment.

Babb filed her reply to the third amended answer and counterclaim on March 4, 2004.  In June 2004, the declaratory action was heard at a bench trial.  The sole issue was whether Babb was a shareholder in LRCI.  The circuit court ruled in favor of Respondents. 


Babb argues the circuit court erred by (1) hearing Respondents’ counterclaim because the statute of limitations had expired; (2) finding the counterclaim related back to the date of the original pleadings; and (3) ruling on Respondents’ waiver defense because it had previously been dismissed by summary judgment.  We disagree.

According to the discovery rule, the statute of limitations begins to run when a cause of action reasonably ought to have been discovered. The statute runs from the date the injured party either knows or should have known by the exercise of reasonable diligence that a cause of action arises from the wrongful conduct.

Hedgepath v. AT&T, 348 S.C. 340, 355-56, 559 S.E.2d 327, 336 (2001) (quoting Dean v. Ruscon, 321 S.C. 360, 468 S.E.2d 64