Small-claims winners learn SC is tough place to collect judgments

gmartin@islandpacket.comAugust 25, 2012 

JoAnn Markwis had just stepped out of the shower when she heard a tree flatten the roof of her two-bedroom apartment in Sun City Hilton Head.

It was June 15, 2010.

She had encountered problems almost immediately upon moving in six weeks earlier -- a broken refrigerator, faulty plumbing in the master bedroom -- but this was her biggest crisis yet.

The tree had broken her bed and mattress, and water had flooded the room. She says she contacted Carolina Rental Service to arrange for her newest and most costly repair.

The Hilton Head Island company, which managed her Sweetwater Court apartment, repaired the property damage within a few days and offered her half off her $900 July rent for her troubles, Markwis said.

But that wasn't enough to offset the costs she'd incurred by living there -- including a refrigerator's worth of spoiled food and a hefty electric bill caused by the fans Carolina Rental Service had brought in to dry the floor.

By the following spring, she had left Sun City for a small town near Rock Hill, but she was still angry enough to take Carolina Rental Service to court to recoup some of her losses.

On March 21, Beaufort County Magistrate David M. Taub sided with Markwis and ordered Carolina Rental Service to pay her $2,182.

"I was so excited," Markwis, 57, remembers. "I think it was the first time in my life I'd ever won anything."

When 30 days had passed without any word from Carolina Rental Service -- Markwis says no one representing the company even attended the hearing -- Beaufort County Sheriff's Office deputies intervened with an "execution against property" to investigate the company's holdings.

They found, however, that the company -- despite managing a number of properties on Hilton Head and in Bluffton and Sun City -- didn't have sufficient assets to make the payment. The Sheriff's Office issued a "nulla bona" to the court, indicating the business could not pay the judgment.

"We don't own the properties, we just manage them," explained Cameron Haught, owner of Carolina Rental Service. "We're not responsible for any damages beyond those caused by (our) direct neglect."

He added he considers the matter resolved.

"It's a very old case, and it's been long over with," he said. "There's no way to revisit it."

NOT ALONE

Markwis joins hundreds of other individuals and businesses unable to collect judgments awarded to them by magistrates. Nulla bona has been issued in more than 150 rulings already this year in Beaufort County, according to court records.

"That's quite common, unfortunately," said Hilton Head Island attorney Sonja Friedman, when told of Markwis' experience.

Friedman said the ruling might make it difficult for Carolina Rental Service to take out future loans or open bank accounts -- saying the judgment serves as a lien against the business for 10 years -- but Markwis is unlikely to receive the money she is owed.

The "vast, vast majority" of writs of execution result in a nulla bona, according to Hilton Head attorney Dean Bell.

"South Carolina is one of the most difficult states I know of to collect a judgment in," he said, citing a statewide prohibition of garnisheeing wages and income. North Carolina and Texas are the only other states with such a law.

"I tell my clients a judgment can be a wonderful thing, but it's really just a piece of paper with a big number on it," he said. "If you want to frame it, it will be the most expensive piece of art you own."

Deputies investigating parties facing a judgment receive a file containing their driving record and information on any vehicles or property owned, according to a document outlining the procedure provided by the Beaufort County Sheriff's Office.

"Our deputies are very diligent, and I can assure you we take this very seriously," said Chief Deputy Michael Hatfield. "I don't know that there would be anything above and beyond what we do that could be done."

He added that investigations are assigned to one deputy and are generally completed within a week.

But the information they uncover is often insufficient to determine whether a judgment can actually be met, Bell said, explaining that deputies do not have access to the parties' bank accounts.

The only way to investigate those is to go back to court after a nulla bona has been filed, he said -- a process that requires an attorney and can cost more than the original judgment owed.

"With the way the economy has gone, you see (nulla bona) a lot more often," said Bluffton attorney Mark Berglind. "We have to warn clients up front that not collecting is a real possibility."

He added that such an outcome can be troubling for lawyers, too. "It's frustrating when someone can be found liable for something ... and get away with it because of a lack of assets."

Berglind stopped short of saying the prevalence of nulla bona undermined local judicial authority.

"Ultimately, I think, the system we have still works," he said.

Markwis, who has yet to collect any money after more than 16 months of waiting, disagrees.

"I never thought it would be so hard for me to collect what I'm owed," she said.

Follow reporter Grant Martin at twitter.com/LowCoBiz.

Related content:

New construction raises concerns in Sun City, Oct. 14, 2011

The Island Packet is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service