A S.C. Court of Appeals decision last week could deprive unhappy timeshare owners of evidence likely to play a key role in more than 30 lawsuits they have filed against Coral Resorts, a Hilton Head Island timeshare company.
But the decision also opens the door to challenge a Beaufort County judge's order to seal public documents related to the company, according to Jay Bender, an attorney for The Island Packet and The Beaufort Gazette. The newspapers are seeking a ruling declaring the records open.
"My thought is that the court of appeals is sending a signal to the circuit court that the law presumes these records are open," said Bender.
The appeals court dismissed an appeal of rulings by 14th Circuit Court Judge Carmen Mullen. Mullen had closed documents related to the company that were originally public, court records show.
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The documents include business records and a transcript of a controversial hearing the company had before the S.C. Real Estate Commission. The transcript sheds light on Coral Resorts' failure to pay annual fees required by the state. It has been sealed by Mullen, another court and a state regulatory official.
Coral Resorts operates Port O'Call at Shipyard Plantation, Island Links, Coral Sands and Coral Reef resorts.
Earlier this month, the newspapers received the transcript from an unknown, anonymous source and published it, believing it is a public document that the public has a right to see.
Attorneys for timeshare purchasers appealed Mullen's decision to seal the transcript and other documents, saying they are public record and might prove the company broke the law.
However, appeals court Chief Judge John C. Few ruled Thursday that the attorneys did not file their paperwork in time. He also said some of the procedures the lawyers questioned cannot be appealed.
His decision kept the documents sealed.
Now, the attorneys for the timeshare purchasers are unsure if those documents -- potentially pivotal in the timeshare owners' cases -- can be used as evidence in court.
"We are currently investigating how the transcript's public availability and the (court of appeals) order will affect the proceedings," Hilton Head attorney Zach Naert said in a statement Friday.
In a statement, Coral Resorts attorney Nekki Shutt agreed with Few's decision.
"We respect the court's order and, while we cannot speculate on what happens next, we hold strongly to our position that the appeals were without merit, which this action of the court supports."
Coral Resorts also had asked the court to seal the appeal case. The company argued that the case contained trade secrets and sealed administrative proceedings, which would include the transcript of the hearing before the state commission.
That request was denied.
In an explanation, Few wrote that the appeal contained "only references to the alleged trade secrets and sealed administrative proceedings, not actual trade secrets or sealed administrative proceedings."
He also listed the twelve factors that must be considered before a public record is sealed.
In doing so, the appeals court sent a message to other courts that have sealed the company's records, according to Bender, the newspapers' attorney.
"The court went beyond just saying there are no trade secrets here," Bender said. "There was a signal sent to circuit court that these are factors that need to be considered and the presumption is a public record will have to be open."
The newspapers had sought to intervene in Coral Resorts' attempt to seal the appeal. Since the appeal was dismissed, the court decided not to rule on the newspapers' request.
Bender said the newspapers next step could be challenging the sealing in circuit court.
There, "Coral Resorts will have to prove why these records need to be closed."
Follow reporter Dan Burley on Twitter at twitter.com/IPBG_Dan.