In The Court of Appeals

Harrell E. Morlan, Respondent,


James A. Kelly and Tamika Kelly, Appellants.

Appeal From Richland County
J. Ernest Kinard, Jr., Circuit Court Judge

Unpublished Opinion No. 2009-UP-002
Heard November 6, 2008 – Filed January 5, 2009


William W. Watkins, Sr., and W.D. Morris, of Columbia, for Appellants.

Tobias G. Ward, Jr., of Columbia, for Respondent.

PER CURIAM: In this action to quiet title, James A. Kelly (James) and Tamika Kelly (Tamika) appeal the dismissal of their counterclaims for civil conspiracy, negligent misrepresentation, and fraud.  James and Tamika assert the trial court erred in dismissing their tort counterclaims on the ground the allegations, based on a purported installment sales contract, failed to prove the existence of some other relationship, irrespective of the contract, that would give rise to a duty in tort.[1]  James and Tamika further assert the trial court erred in ordering payment of fire insurance and property taxes pending a trial on the merits.   We reverse and remand.

1.  As to the dismissal of the tort counterclaims, we find the trial court erred in dismissing the counterclaims on the basis of the parties’ contractual relationship as opposed to some other relationship giving rise to a duty outside of the contract.  We note the trial court denied summary judgment acknowledging a dispute as to the existence of the contract.  Until the factual conflict as to the existence of the contract is resolved, the dismissal of the counterclaims on the basis of any alleged contract where the existence of that contract is disputed was error.  Moreover, the counterclaimant sufficiently alleged a civil conspiracy cause of action.  See Pye v. Estate of Fox, 369 S.C. 555, 567, 633 S.E.2d 505, 511 (2006) (stating the elements of conspiracy).  Additionally, as to negligent misrepresentation and fraud, review of the allegations reveals a duty in tort was sufficiently alleged by way of agency, especially noting paragraphs fifteen and twenty-one in the pleadings.  Accordingly, we find the trial court’s dismissal of the counterclaims was erroneous.  

2.  As to special damages for civil conspiracy, we find the pleadings sufficiently alleged special damages.  The statement in paragraph fourteen asserting damage from the eviction actions in magistrate court constitutes a sufficient allegation of special damages as the damages from defending the eviction actions stem from the overt act and are not included in the other two counterclaims.  See Rule 9(g), SCRCP (“When items of special damage are claimed, they shall be specifically stated.”); Pye, 369 S.C. at 567-68, 633 S.E.2d at 511 (stating the gravamen of the tort of civil conspiracy is the damage resulting to the plaintiff from an overt act done pursuant to the combination and noting the damages alleged must go beyond the damages alleged in other causes of action).  Accordingly, the trial court erred in dismissing the civil conspiracy claim on this alternative basis. 

3.  As to whether the pleadings failed to allege circumstances of fraud pursuant to Rule 9(b), SCRCP, we find the pleadings sufficiently allege all nine elements of fraud with particularity; therefore, the trial court’s dismissal of the fraud counterclaim on this basis was error.  See Rule 9(b), SCRCP (the circumstances constituting fraud shall be stated with particularity); Schnellmann v. Roettger, 373 S.C. 379, 382, 645 S.E.2d 239, 241 (2007) (stating a cause of action for fraud requires the following elements: (1) a representation; (2) its falsity; (3) its materiality; (4) knowledge of its falsity or a reckless disregard for its truth or falsity; (5) intent that the representation be acted upon; (6) the hearer’s ignorance of its falsity; (7) the hearer’s reliance on its truth; (8) the hearer’s right to rely thereon; and (9) the hearer’s consequent and proximate injury). 

4.  Finally, with regard to whether the trial court erred in ordering payment of fire insurance and property taxes pending trial, the court need not address this issue as it is interlocutory and, therefore, not directly appealable. See Temples v. Ramsey, 285 S.C. 600, 602, 330 S.E.2d 558, 559 (Ct. App. 1985) (dismissing appeal where the trial court order denying mistrial and granting continuance conditioned on payment of certain costs was interlocutory and therefore not directly appealable).  Even if we were to consider this issue along with the other appealable issues, we find no abuse of discretion.  The trial court, sitting in equity, has the inherent power to preserve property during the pendency of litigation.  Cf. County Council of Charleston v. Felkel, 244 S.C. 480, 480, 137 S.E.2d 577, 577 (1964) (“In [the] case of property rights the purpose [of a temporary injunction] is to preserve the status quo pending litigation.”).  Here, the trial court ordered appellants to pay property taxes and insurance on the property pending litigation of the matter in order to preserve the status quo.   The trial court based this finding on the ground that appellants are in exclusive possession of the property.  Additionally, the trial court provided for proration of taxes and insurance paid in the final order, if necessary.  Accordingly, it was not an abuse of discretion for the court to order payment of taxes and insurance pending trial.



[1] James and Tamika did not raise the argument that an equitable interest in an installment contract must be foreclosed; therefore, that issue is not before us for review.