Wednesday, April 29, 2009

Important Changes in South Carolina's Appellate Court Rules, Rules of Civil Procedure, and ADR Rules

by Christian Stegmaier

Hat tip to Andy Cole of C&L for the following advisory:

Recent amendments to the Appellate Court Rules, Civil Procedure Rules, and ADR Rules became effective today as confirmed by orders by the Supreme Court.

The Appellate Court Rules renumber some sections (general provisions), add guidance for DNA appeals (new rule 247, SCACR), and revised the rule for retention and disposition of exhibits in the Circuit and Family Courts.

Appellate Court Rule 232 (which is re-numbered to 261 per Order 2009-04-02-03) is amended to reflect changes in Rule 43(k), SCRCP, regarding settlement agreements.

Rule 43(k), SCRCP, is amended by Order 2009-04-02-04, by adding back into the rule the understanding that a written settlement agreement that is executed by both the parties and their attorneys is binding. The rule now reads:

(k) Agreements of Counsel. No 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, or reduced to writing and signed by the parties and their counsel. Settlement agreements shall be handled in accordance with Rule 41.1, SCRCP.

Lastly, the ADR Rules have been amended by Order 2009-04-29-01 to essentially (a) make ADR mandatory in EVERY county if so ordered by the Court, and (b) make the ADR rules apply to ALL state mediations and arbitrations. One may read the rule as deeming "mandatory" and subject to the ADR Rules all ADR conferences in the designated counties (Florence, Horry, Lexington, Richland, Greenville, Anderson, and the Family Court only in Pickens, per Sup.Ct. Order executed June 21, 2006) as well as any referenced mediation in a scheduling order. The revised rule includes some exceptions (new Rule 1(b), ADR) for the non-mandatory ADR conferences. These exceptions mostly deal with timing issues. Of greater impact, however, is that Rule 6, ADR, that provides the list of required attendees is not applicable for a completely voluntary settlement conference. Given the broad sweep of Rule 1, ADR now; however, the non-mandatory ADR cases will be few and far between.

This post should not be construed as legal advice or the formulation of an attorney-client relationship. Please contact counsel with any questions you may have regarding this matter.

The Explainer: Brief Primer on Alcohol Liability for South Carolina Restaurants/Bars

by Christian Stegmaier
cstegmaier@collinsandlacy.com

Restaurants and bars have competing interests regarding the sale of alcohol. On one hand, sale of alcohol can be very profitable; however, on the other hand, it can create tremendous liability, which in turn incentivizes them to moderate both the promotion and the sale of alcohol.

The sale of alcohol is intensely regulated by the government. In South Carolina, a bar or restaurant must possesses a license to sell alcohol in an on-premises manner. The Department of Revenue regulates the sale of alcohol. The State Law Enforcement Division (SLED) has primary enforcement responsibility. It works with local law enforcement to enforce the laws. As a general rule, the government shows very little leniency when it comes to the regulation of the sale of alcohol.

A license to sell alcohol can be revoked or suspended for violation of the alcohol laws. Additionally, license holders can be fined for violations.

In South Carolina, it is against the law to: sell to underage patrons and persons who are visibly intoxicated.

S.C. Code Ann. § 61-4-50 states:

(A) It is unlawful for a person to sell beer, ale, porter, wine, or other similar malt or fermented beverage to a person under twenty-one years of age. A person who makes a sale in violation of this section, upon conviction:

(1) for a first offense, must be fined not less than two hundred dollars nor more than three hundred dollars or imprisoned not more than thirty days, or both; and

(2) for a second or subsequent offense, must be fined not less than four hundred dollars nor more than five hundred dollars or imprisoned not more than thirty days, or both.

(B) Failure of a person to require identification to verify a person's age is prima facie evidence of the violation of this section.

(C) A person who violates the provisions of this section also is required to successfully complete a DAODAS approved merchant alcohol enforcement education program. The program must be a minimum of two hours and the cost to the person may not exceed fifty dollars.

S.C. Code Ann. § 61-4-580 states:

No holder of a permit authorizing the sale of beer or wine or a servant, agent, or employee of the permittee may knowingly commit any of the following acts upon the licensed premises covered by the holder's permit:

(1) sell beer or wine to a person under twenty-one years of age;

(2) sell beer or wine to an intoxicated person;

(3) permit gambling or games of chance except game promotions including contests, games of chance, or sweepstakes in which the elements of chance and prize are present and which comply with the following:

(a) the game promotion is conducted or offered in connection with the sale, promotion, or advertisement of a consumer product or service, or to enhance the brand or image of a supplier of consumer products or services;

(b) no purchase payment, entry fee, or proof of purchase is required as a condition of entering the game promotion or receiving a prize; and

(c) all materials advertising the game promotion clearly disclose that no purchase or payment is necessary to enter and provide details on the free method of participation.

(4) permit lewd, immoral, or improper entertainment, conduct, or practices. This includes, but is not limited to, entertainment, conduct, or practices where a person is in a state of undress so as to expose the human male or female genitals, pubic area, or buttocks cavity with less than a full opaque covering;

(5) permit any act, the commission of which tends to create a public nuisance or which constitutes a crime under the laws of this State; or

(6) sell, offer for sale, or possess any beverage or alcoholic liquors the sale or possession of which is prohibited on the licensed premises under the law of this State; or

(7) conduct, operate, organize, promote, advertise, run, or participate in a “drinking contest” or “drinking game”. For purposes of this item, “drinking contest” or “drinking game” includes, but is not limited to, a contest, game, event, or other endeavor which encourages or promotes the consumption of beer or wine by participants at extraordinary speed or in increased quantities or in more potent form. “Drinking contest” or “drinking game” does not include a contest, game, event, or endeavor in which beer or wine is not used or consumed by participants as part of the contest, game, event, or endeavor, but instead is used solely as a reward or prize. Selling beer or wine in the regular course of business is not considered a violation of this section.

In commercial settings, South Carolina appellate courts have held that a statute criminalizing the sale of beer or wine to a person under the age of 21 and one providing regulatory penalties for the knowing sale to a person under 21 places a duty on a commercial vendor. A vendor who violates this duty and sells to a person under 21 may be liable to the unlawful purchaser, and to third parties harmed by the purchaser's consumption of the alcohol. Whitlaw v. Kroger Co., 306 S.C. 51, 410 S.E.2d 251 (1991).

Our courts have also imposed third party liability on the holder of an on-premises sales and consumption license who violated an alcoholic beverage control regulation by permitting an underage person to consume alcoholic beverages on the holder's premises. E.g., Norton v. Opening Break of Aiken, Inc., 313 S.C. 508, 443 S.E.2d 406 (Ct.App.1994).

South Carolina does not recognize a “first party” cause of action against the tavern owner by an intoxicated adult predicated on an alleged violation of the alcohol control statutes; however, as noted above, there exists “third party” liability. This means the person injured by the wrongful acts of a patron who was knowingly overserved or was underaged can sue the establishment in tort for the injuries he/she sustained. With regard to an overserved partron (who was 21 or older), a commercial host is liable only to third parties injured by an intoxicated adult guest, and then only when he knowingly sells alcoholic beverages to an intoxicated person.

This post should not be construed as legal advice or the initiation of the attorney-client relationship. Contract counsel regarding matters/questions you may have re: this issue.

Tuesday, April 28, 2009

The Explainer: Permissibility of Employees Representing the Company in Magistrate’s Court

by Christian Stegmaier
cstegmaier@collinsandlacy.com

On occasion, we're asked whether an employee may represent his/her company in actions pending before the Magistrate’s Courts in South Carolina. Our courts have answered that question in the affirmative.

In State v. Wells, 191 S.C. 468, 5 S.E.2d 181 (1939), the Supreme Court held a lay person could not represent a corporation. However, in In re Unauthorized Practice of Law, 309 S.C. 304, 422 S.E.2d 123 (1992), the Court modified Wells “to allow a business to be represented by a non-lawyer officer, agent or employee, including attorneys licensed in other jurisdictions and those possessing Limited Certificates of Admission pursuant to Rule 405, SCACR, in civil magistrate's court proceedings.” Id. at 306, 422 S.E.2d at 124 (quoted with approbation by Renaissance Enterprises, Inc. v. Summit Teleservices, Inc., 334 S.C. 649, 651, 515 S.E.2d 257, 258 (1999).

“Such representation may be compensated and shall be undertaken at the business's option ….” Id. However, “the business assumes the risk of any problems incurred as the result of such representation.” Id. Further, “[t]he magistrate shall require a written authorization from the entity's president, chairperson, general partner, owner or chief executive officer, or in the case of a person possessing a Limited Certificate, a copy of that Certificate, before permitting such representation.” Id.

Companies need to carefully consider whether to "go it alone" in Magistrate's Court. Sometimes, the matter is straightforward or the stakes are not high; however, in other circumstances - where there is substantial money involved or a complicated legal issue - the safe bet is to retain counsel. Keep in mind that the rules of procedure and evidence apply to the company, regardless if it is representing itself without counsel. An unknowning lay person could get jammed up to the company's detriment on the technical application of the rules.

FYI - the jurisdictional maximum for recovery in civil cases in South Carolina is $7,500.

The preceding does not constitute either legal advice or the establishment of an attorney-client relationship. Refer questions about this matter to counsel for further explanation.

Monday, April 20, 2009

The Explainer: Merchant’s Defense to Claims Arising from Shoplifting: S.C. Code Ann. § 16-13-140

by Christian Stegmaier
cstegmaier@collinsandlacy.com

One of the largest sources of claims in the retail sector is LP or loss prevention claims. Patrons accued of shoplifting will sometimes bring actions in tort against a retailer, alleging false imprisonment, slander, intentional infliction of emotional distress, and malicious prosecution. These claims can cause large headaches for retailers. A statutory defense exists in South Carolina for retailers who make a stop based upon probable cause that the patron has either stolen or actively concealed merchandise. This defense operates to immunize a retailer acting in good faith from civil prosecution. The following is an explanation of this statutory defense, known as the "Merchant's Defense."

The General Assembly created a statutory privilege, which protects merchants who reasonably suspect patrons have committed shoplifting in their establishments. Specifically, § 16-13-140 provides:

In any action brought by reason of having been delayed by a merchant or merchant’s employee or agent on or near the premises of a mercantile establishment for the purpose of investigation concerning the ownership of any merchandise, it shall be a defense to such action if: (1) [t]he person was delayed in a reasonable manner and for a reasonable time to permit such investigation, and (2) reasonable cause existed to believe that the person delayed had committed the crime of shoplifting.

Thus, South Carolina law protects merchants and their employees who stop suspected shoplifters upon two conditions:
(1) the suspected shoplifter was delayed in a reasonable manner and for a reasonable amount of time to permit investigation; and

(2) reasonable cause existed to believe the person delayed committed the crime of shoplifting.

Section 16-13-140 refers to “the crime of shoplifting,” which is defined in § 16-13-110
of the South Carolina Code:

A person is guilty of shoplifting if he:

(1) takes possession of, carries away, transfers from one person to another or from one area of a store or other retail mercantile establishment to another area, or causes to be carried away or transferred any merchandise displayed, held, stored, or offered for sale by any store or other retail mercantile establishment with the intention of depriving the merchant of the possession, use, or benefit of the merchandise without paying the full retail value;

(2) alters, transfers, or removes any label, price tag marking, indicia of value, or any
other markings which aid in determining value affixed to any merchandise
displayed, held, stored, or offered for sale in a store or other retail mercantile establishment and attempts to purchase the merchandise personally or in consort with another at less than the full retail value with the intention of depriving the merchant of the full retail value of the merchandise;

(3) transfers any merchandise displayed, held, stored, or offered for sale by any
store or other retail mercantile establishment from the container in which it is
displayed to any other container with intent to deprive the merchant of the full
retail value.

Concealment of unpurchased merchandise creates the prima facie presumption of an intent to deprive. Section 16-13-120 states:

It is permissible to infer that any person wilfully concealing unpurchased goods or merchandise of any store or other mercantile establishment either on the premises or outside the premises of the store has concealed the article with the intention of converting it to his own use without paying the purchase price thereof within the meaning of § 16-13-110. It is also permissible to infer that the finding of the unpurchased goods or merchandise concealed upon the person or among the belongings of the person is evidence of wilful concealment. If the person conceals or causes to be concealed the unpurchased goods or merchandise upon the person or among the belongings of another, it is also permissible to infer that the person so concealing such goods wilfully concealed them with the intention of converting them to his own use without paying the purchase price thereof within the meaning of § 16-13-110.


Sections 16-13-110 and -120 are arguably to be read in conjunction with one another.
To constitute a defense under the Merchant’s Defense statute, the conduct of the merchant or the merchant’s employee in delaying the customer must be supported by probable cause and the delay must be reasonable in time and manner and can only be justified during the commission of a suspected wrongdoing. Therefore, as a matter of course, the jury in an action such as the one at bar is to consider the definition of shoplifting with regard to factor number two, which reads: “reasonable cause existed to believe that the person delayed had committed the crime of shoplifting.”

The critical aspect of the Merchant’s Defense revolves around the “reasonable cause” requirement. A key element of the Merchant’s Defense is the existence of reasonable cause to believe the person detained committed “the crime of shoplifting.” The law of this state is that the phrase “reasonable cause,” as set out in § 16-13-140, in fact means “probable cause” so that probable cause must have existed to believe the person delayed had committed the crime of shoplifting.

“Probable cause” is defined as “a good faith belief that a person is guilty of a crime when this belief rests on facts that would induce an ordinarily prudent and cautious person, under the circumstances, to believe the person is guilty of a crime.” Probable cause involves the existence of such facts or circumstances as would excite the belief of a reasonable mind - acting on facts known to the merchant - that the person delayed had committed the crime of shoplifting.

Section 16-13-140 provides a defense to the false imprisonment claim if the merchant has probable cause to believe a person is taking his property and acts reasonably in his efforts to investigate the matter. That is to say, probable cause is a defense under § 16-13-140 to actions arising from a merchant’s delay of suspected shoplifters. This defense applies and protects the merchant and its employees even though the customer is not actually guilty of shoplifting.

Determining if reasonable cause actually existed in a shoplifting case is typically a question of fact for the jury to decide.

In determining probable cause, only those facts and circumstances that were or should have been known to the defendant at the time the plaintiff was stopped should be considered. Probable cause exists even if the facts relied on subsequently prove to be false or incorrect as long as the facts known at the time plaintiff was stopped would have induced a reasonable and prudent person to believe plaintiff was guilty of the crime of shoplifting and a reasonable person would have relied on those facts. The facts known to the defendant must only give rise to a reasonable inference that the person delayed was guilty of shoplifting.

A reasonable stop and delay, along with the existence of probable cause to believe the person delayed had committed the crime of shoplifting, constitute a full and complete defense to any claim arising from the stop and delay. In other words, if the jury finds from the evidence and reasonable inferences therein that the merchant or its employees had probable cause to believe the customer had committed the crime of shoplifting and that the customer was delayed in a reasonable manner and for a reasonable time under the circumstances, the customer cannot recover from the merchant, even though the customer did not actually shoplift.

Probable cause does not turn upon the plaintiff’s actual guilt or innocence. The test is whether the facts known to the merchant or the merchant’s employees would lead a reasonable person to believe that plaintiff was guilty of shoplifting. The fact that a customer did not shoplift does not mean the store personnel did not have reasonable grounds to detain him or her in the first place. In other words, the law recognizes the interest of a store owner in protecting his property. In an effort to protect his interest, the law allows a store owner to detain a person for a reasonable amount of time where probable cause exists to believe the person delayed committed the crime of shoplifting.

Probable cause does not mean absolute certainty. The facts known to the merchant or the merchant’s employees do not have to absolutely establish that the customer stopped was engaged in criminal activity. The facts known to the merchant or the merchant’s employees must only give rise to a reasonable inference that the person delayed was guilty of shoplifting.

The reasonableness of the merchant’s delay of the suspected shoplifter must be judged by the circumstances at the time of the stop and delay and not by facts later known or discovered by the merchant. The jury must judge the reasonableness of the manner and time of the delay by the facts known to the merchant or his employees at the time.

Section 16-13-140 gives a merchant and its employees the right to reasonably delay customers or patrons on or near the merchant’s establishment to determine the ownership of property. This section not only gives the merchant or the merchant’s employees the right to delay a suspected shoplifter, but also gives a right to require the suspected shoplifter to return to the merchant’s establishment and/or remain in the merchant’s establishment until a reasonable investigation can be conducted into the suspected shoplifting.

Much credit is given to The Honorable Ralph King Anderson, Jr., Requests to Charge – Civil for a good portion of this analysis, particularly in the later paragraphs. Contact the SC Bar at scbar.org for more information regarding this invaluable source of information to lawyers practicing in South Carolina.

The following should not be considered legal advice. For advice about a legal question you may have concerning shoplifting, the Merchant’s Defense, etc., contact a lawyer licensed in your state to discuss the same.

Friday, April 17, 2009

Columbia Restaurants Need Your Support - - - Get Out There and Eat

by Christian Stegmaier
cstegmaier@collinsandlacy.com

Columbia has some wonderful restaurants.  Over the years, we've eaten at places like Mr. Friendly's, Yesterdays, Blue Marlin, etc. and enjoyed every meal.  Thousands of folks are employed in these businesses and depend on loyal patronage for their survival.  We're Facebook friends with a great establishment in Five Points - Cellar on Greene.  Tremendously knowledgeable re: wines and priced well, Cellar on Greene is a great place to go on a Friday night.   We picked up on an Facebook exchange tonight re: business in Five Points, which relates that things have been slow as of late.  A disappointing report to say the least.  Like Dave Ramsey says, we need to refuse to participate in the recession --- and patronize great places like Cellar on Greene.

Click on: www.cellarongreene.com

Saturday, April 11, 2009

Smart Uses of Twitter by Retailers & Hospitality-Related Companies to Protect the Brand

by Christian Stegmaier
cstegmaier@collinsandlacy.com

While much has been written about Twitter and its uses, the power of its application in the retail and hospitality sectors cannot be stressed enough. Twitter is many things, including: microblogger; messenger; marketing platform; and a gateway to further conversation via related website and blog.  
One notable hospitality-related company actively using Twitter is Marriott International.  A global icon, Marriott uses Twitter to promote its brand and corporate message, as well to monitor guest compliments and complaints. There is perhaps no other hospitality-related company, which uses Twitter as frequently and effectively as Marriott.

As has been written on this blog on multiple occasions, I am very interested in using social media such as Twitter to protect the brand.  Within recent weeks, I have been an active user of various Twitter search tools such as search.twitter.com to see what folks are saying about our firm's retail and hospitality clients, as well as non-clients in those sectors.  My feeling is this: the better the goodwill and brand identity a company has, the better jurors may feel about the company in the future trial scenario.  Twitter is a real time mechanism to measure what people think and feel about the companies they come in contact with.  Folks aren't shy to complain or compliment about the goods and services they buy.  Twitter has proven to be a very good platform for this type of commentary.

As Twitter becomes used by greater numbers of people both in the United States and worldwide, retailers and hospitality-related companies will be well-served to designate a person or persons as the Twitter(s)-In-Charge. These people will be responsible for both the tweets that go out, but also to monitor Twitter to review (and possibly respond to) customer compliments, complaints, requests for assistance, ideas, etc.  Having such personnel in place will enable retailers and hospitality-related companies to quickly respond to criticism or requests and capitalize on suggestions or ideas. Also, Twitter is the future.  The quicker companies get organized and employ a sophisticated and thoughtful Twitter presence, the more "cutting edge" and competitive they will be perceived to be in their respective sectors.