STATE OF SOUTH CAROLINA
COUNTY OF GREENVILLE
A. June Lennon,
David A. Smith; Kenneth J. Martin; Martin & Lennon CPAs, PA; SML Properties, LLC; and Martin Smith & Company, CPAs, PA,
IN THE COURT OF
CIVIL ACTION NO: 2007-CP-23-8281
ORDER ON DEFENDANTS’ MOTION TO ENFORCE SETTLEMENT
This matter came before the Court pursuant to Defendants Motion to Enforce Settlement on March 10, 2009. Based on the evidence before the Court and argument by counsel, the Court hereby makes the following Findings of Fact and Conclusions of Law.
FINDINGS OF FACT/CONCLUSIONS OF LAW
The parties to this case engaged in mediation on December 4, 2008 and December 16, 2008, which resulted in a written Memorandum of Agreement signed by the parties, their legal counsel, and the mediator (hereinafter Agreement). The Agreement addresses all of the issues in the above-referenced case but is essentially divided into two (2) sections: the first outlining the resolution of the parties dispute over Martin and Lennon, CPAs, PA; and the second outlining the resolution of the parties dispute over SML Properties, LLC. The parties concede that there is no ambiguity about that portion of the Agreement relating to the dispute over Martin & Lennon, CPAs, PA. However, Plaintiff contends that the terms of the Agreement relating to the dispute over SML Properties, LLC is ambiguous. Specifically, Plaintiff contends that the term appraisal as used in the Agreement is ambiguous.
The following language contained on page 2 of the Agreement and the referenced Exhibit 3 are the relevant portions of the Agreement for purposes of deciding this Motion to Enforce Settlement.
The parties agree to the values under Option 2 of the attached Exhibit 3 to this agreement, with the exception that the office building will be appraised by Chuck Stone, and the value of his appraisal will be plugged into the Option 2 formula.
Within days of the Agreement, Chuck Stone was retained for the purpose of performing an appraisal of the office building, SMLs primary asset. He and his associate, Tom Mahaffey, performed a fair market value appraisal, which was $580,000.00. Plaintiff later requested that Tom Mahaffey provide an investment value appraisal, and he did so in a supplemental report. The investment value appraisal was $660,000.00. Plaintiff contends that a fair market value is unfair to her and should not be in used in light of her contention that the term appraisal is ambiguous.
Absent some indication that an appraisal is going to be something other than fair market value, an appraisal is intended to establish fair market value. W. Pate v. Ford, 293 SC 268, 287, 360 SC2d 145 (1986) ( Appraised value usually means fair market value or the price property will bring on the market after reasonable efforts to find a buyer who would give the highest price for it. (citations omitted).)
However, it is not necessary to consider the usual meaning of the term appraisal. Exhibit 3 makes clear that the appraisal contemplated and agreed to by the parties was a fair market value appraisal. Exhibit 3 specifically refers to the fair market value of the office building and improvements in the Option 2 formula, i.e. fmv [fair market value] of assets and fmv [fair market value] of building subject to appraisal. There is no evidence the parties intended that the appraisal be anything other than fair market value. There is no reference to investment value, which according to Tom Mahaffeys supplemental report, is subjective.
Moreover, if the term appraisal is ambiguous, extrinsic evidence also reveals that the parties intended to obtain a fair market value appraisal. When Plaintiff submitted a counterproposal to Defendants mediation proposal, she incorporated the fair market value of the office building in it.
The Court finds that the $580,000.00 figure resulting from the parties appraisal should be plugged into the Option 2 formula. The result leaves the Plaintiff with a negative balance of $11,181.00 that must be paid to Defendants Smith and Martin.
ACCORDINGLY, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that: the Defendants Motion to Enforce Settlement is hereby granted; and the parties shall comply with the Agreement, with Defendants paying Plaintiff $84,150.00, and Plaintiff paying Defendants Smith and Martin $11,181.00 and paying one-third of the cost of the appraisal. All payments due under this Order shall be made within five (5) days of the deadline for appealing it.
AND IT IS SO ORDERED.
Honorable Judge Edward Miller
April 13, 2009