                    THE STATE OF SOUTH CAROLINA
                         In The Supreme Court

            Otha Delaney, Petitioner,

            v.

            First Financial of Charleston, Inc., Respondent.

            Appellate Case No. 2017-000683



       ON WRIT OF CERTIORARI TO THE COURT OF APPEALS



                        Appeal from Charleston County
                  Stephanie P. McDonald, Circuit Court Judge


                            Opinion No. 27884
                 Heard November 8, 2018 – Filed May 8, 2019


                                  REVERSED


            Philip L. Fairbanks, of The Law Offices of Philip
            Fairbanks, PC, Kathy D. Lindsay, of Kathy D. Lindsay,
            PA, and Frederick M. Corley, all of Beaufort, for
            Petitioner.

            Stephen Lynwood Brown, Russell Grainger Hines, and
            Perry McPherson Buckner IV, all of Young Clement
            Rivers, LLP, of Charleston, for Respondent.


JUSTICE HEARN: This case concerns when a claim for deficient notice of
disposition of collateral under Article 9 of the Uniform Commercial Code accrues
for statute of limitation purposes. The circuit court held the limitations period began
upon receipt of the allegedly deficient notice, and the court of appeals affirmed in a
split decision. Delaney v. First Fin. of Charleston, Inc., 418 S.C. 209, 791 S.E.2d
546 (Ct. App. 2016). We hold the limitations period begins only upon disposition;
accordingly, we reverse.

                    FACTS/PROCEDURAL BACKGROUND
       In October of 2007, Petitioner Otha Delaney bought a 2003 Chevrolet pick-
up truck from Coliseum Motors pursuant to a retail installment sales contract. The
dealership subsequently assigned the contract to Respondent First Financial of
Charleston, Inc., which acquired a security interest under the UCC. After Delaney
failed to make payments, First Financial lawfully repossessed the truck, and on May
2, 2008, it sent Delaney a letter entitled, "Notice of Private Sale of Collateral." Over
seven months later, on December 15, 2008, First Financial sold the truck.

       On October 3, 2011, more than three years after sending notice but less than
three years from the sale of the truck, Delaney filed suit against First Financial,
seeking to represent a class of individuals who had received notice that allegedly
failed to comply with certain requirements in Article 9. Accordingly, Delaney
asserted he was entitled to the statutory penalty under section 36-9-625(c)(2) of the
South Carolina Code (2003). First Financial moved to dismiss pursuant to Rule
12(b)(6), SCRCP, asserting the statute of limitations had expired. Before the trial
court, the parties disputed whether the appropriate limitations period was one, three,
or six years.1

       After a hearing, the trial court found: (1) the remedy Delaney sought pursuant
to section 36-9-625(c)(2) was a statutory penalty; (2) the six-year Article 2
limitations period did not apply because Delaney failed to plead breach of contract,
the claim solely concerned deficient notice under Article 9, and even if Article 2
applied, the more specific limitations period on penalties governed; and finally, (3)
under either limitation period, Delaney's claim was time-barred as his action accrued
upon receipt of the allegedly deficient notice.


1
  Delaney abandoned his assertion that the six-year limitations period under Article
2 governed, as he only addressed the one and three-year provisions in his brief before
this Court. First Sav. Bank v. McLean, 314 S.C. 361, 363, 444 S.E.2d 513, 514
(1994) (failing to provide arguments or supporting authority renders the issue
abandoned). Additionally, at oral argument, counsel for First Financial conceded the
three-year statute of limitations prescribed in section 15-3-540(2) (2005) applied.
        The court of appeals affirmed in a split decision, holding that because the
claim concerned deficient notice, it accrued upon receipt of the notice. Delaney, 418
S.C. at 222, 791 S.E.2d at 552. Concluding Delaney's claim was untimely under
either the one or three-year limitations period for an action upon a statutory penalty,
the court affirmed. Id. at 222, 791 S.E.2d at 552. Judge Thomas concurred in the
majority's decision that Article 2's six-year limitations period did not apply, but
dissented on the issue as to when Delaney's cause of action accrued, finding that it
accrued upon disposition of the collateral. Id. at 222, 791 S.E.2d at 552–53 (Thomas,
J., dissenting). Delaney sought a writ of certiorari, which we granted.

                                       ISSUES
Does the statute of limitations for an Article 9 deficient notice of disposition of
collateral claim begin to when notice is provided or upon the disposition of the
collateral?

                            STANDARD OF REVIEW
      An appellate court reviews dismissal from a Rule 12(b)(6), SCRCP motion
under the same standard employed by the trial court. Fabian v. Lindsay, 410 S.C.
475, 482, 765 S.E.2d 132, 136 (2014). The facts are construed in the light most
favorable to the nonmoving party, and all well-pled allegations are considered true.
Overcash v. S.C. Elec. & Gas Co., 364 S.C. 569, 572, 614 S.E.2d 619, 620 (2005).
However, questions of law are decided de novo. Town of Summerville v. City of
North Charleston, 378 S.C. 107, 110, 662 S.E.2d 40, 41 (2008).

                                   DISCUSSION

I. Accrual Date

       Delaney asserts the court of appeals erred in holding his claim accrued upon
receipt of the notice instead of when First Financial disposed of the collateral,
contending section 36-9-611(b) only requires a secured party "that disposes of
collateral" to provide notice. Because in Delaney's view the notice is not final until
disposition, the statute of limitations does not begin to run until that point in time.
Conversely, First Financial argues the limitations period began when the
noncompliant notice was sent, without regard to the date of disposition. We agree
with Delaney.

      Section 36-9-611 of the South Carolina Code, entitled, "Notification before
disposition of collateral," requires a secured party to provide notice of its plans to
dispose of the collateral. Specifically, subsection (b) states, "Except as otherwise
provided in subsection (d), a secured party that disposes of collateral under Section
36-9-610 shall send…a reasonable authenticated notification of disposition." While
the contents and form of the notice are governed by sections 36-9-613 and 614, the
statutory penalty pursuant to section 36-9-625(c)(2) for failing to comply with those
provisions is triggered only when all the elements of section 36-9-611(b) are present.
We agree with Judge Thomas that a claim for failing to comply with section 36-9-
611(b) does not accrue "unless and until [the secured party] disposes of the
collateral." Delaney, 418 S.C. at 223–24, 791 S.E.2d at 553 (Thomas, J., dissenting).

        In addition to section 36-9-611(b), the corresponding Official Comments
provide, "Nothing in this Article prevents a secured party from electing not to
conduct a disposition after sending a notification." S.C. Code Ann. § 36-9-611(b)
cmt.8. Moreover, the comment notes that a secured party may send a revised notice
if "the secured party acts in good faith, the revised notification is reasonable, and the
revised plan for disposition and any attendant delay are commercially reasonable."
Id. Thus, while a secured party is required to send notification when it plans to
dispose of collateral, it is also permitted to send a revised notification up until a
reasonable time before disposition. We believe that by allowing such revisions, the
drafters intended the sufficiency of notice to be assessed as of the date of disposition.

       We reject the notion that the availability of an injunction under section 36-9-
625(a) compels a contrary result. This provision enables the circuit court to restrain
disposition when the "secured party is not proceeding in accordance with this
chapter." First Financial contends if a party can seek an injunction before the
collateral is disposed of, then it can recover the penalty at the same time. However,
the General Assembly used different terms for these two remedies, and we cannot
impose the broader "not proceeding in accordance" language into section 36-9-
625(c)(2)'s requirement that a secured party "failed to comply." See Gordon v.
Phillips Utilities, Inc., 362 S.C. 403, 406, 608 S.E.2d 425, 427 (2005) ("[T]he
legislature intends to accomplish something by its choice of words, and would not
do a futile thing."). To do so otherwise is contrary to our principle of construing
statutory penalties narrowly. Wallace v. Wannamaker, 231 S.C. 158, 163, 97 S.E.2d
502, 505 (1957) ("The prime rule requires strict construction of a statutory provision
which would work a forfeiture or inflict a penalty."). Accordingly, Delaney's claim
did not accrue until First Financial disposed of the collateral.2 Having concluded the

2
  We note that comment four to section 36-9-625(c)(2) states this provision "is
designed to ensure that every noncompliance with the requirements of Part 6 in a
consumer-goods transaction results in liability, regardless of any injury that may
limitations period did not begin until December 15, 2008, we next turn to which
statute of limitations governs.

II. Applicable Statute of Limitations
       Before the trial court and the court of appeals, the parties disputed whether
the one or three-year limitations period applied to an action upon a statutory penalty.
At oral argument before this Court, counsel for First Financial conceded the three-
year limitations period applied, and we agree.

       Section 15-3-540(2) sets forth a three-year limitations period for "[a]n action
upon a statute for a penalty or forfeiture when the action is given to the party
aggrieved or to such party and the State, except when the statute imposing it
prescribes a different limitation." (emphasis added). Conversely, section 15-3-570
provides in part, "An action upon a statute for a penalty or forfeiture given, in whole
or in part, to any person who will prosecute for it must be commenced within one
year after the commission of the offense." (emphasis added). We are persuaded by
this reasoning by the Fourth Circuit:

      Section 15–3–570, however, was clearly intended to encompass more
      persons than only "the party aggrieved" (if it was meant to encompass
      "the party aggrieved" at all). To apply the more general section 15–3–
      570, and not the more specific section 15–3–540…would contravene
      the "basic principle of statutory construction that when two statutes are
      in conflict, a specific statute closely applicable to the substance of the
      controversy at hand controls over a more generalized provision."

Pressley v. Tupperware Long Term Disability Plan, 553 F.3d 334, 339 (4th Cir.
2009) (internal citation omitted). Moreover, as the Fourth Circuit noted, we have
applied the three-year limitations period when the claim is brought by the aggrieved
party and the one-year provision when filed by a third party. Compare Tilley v.
Pacesetter Corp., 333 S.C. 33, 41, 508 S.E.2d 16, 20 (1998) (applying the three-year
statute in a class action lawsuit brought by buyers who alleged the seller failed to
comply with the South Carolina Consumer Protection Code), with Montjoy v. One
Stop of Abbeville, Inc., 325 S.C. 17, 19, 478 S.E.2d 683, 684 (1996) (holding the

have resulted." However, pursuant to comment eight to section 36-9-611, a secured
party prior to disposition may amend a noncompliant notice to remove the defect.
While the sufficiency of the notice would still be assessed as of the date of
disposition, the efficacy of an amended notice as to whether the secured party would
remain liable for the statutory penalty is not before us.
one-year statute of limitations governed an action by a third party to recover
gambling losses). Accordingly, because Delaney is an aggrieved party, the three-
year limitations period under section 15-3-540(2) applies.

                                  CONCLUSION
       Delaney's claim for deficient notice of disposition of collateral did not accrue
until First Financial disposed of the collateral. Accordingly, because Delaney filed
this action within three years from that date, we reverse and remand for further
proceedings.

REVERSED.

BEATTY, C.J., FEW and JAMES, JJ., concur. KITTREDGE, J., concurring
in part and dissenting in part in a separate opinion.
JUSTICE KITTREDGE: I concur with the majority insofar as the applicability
of the three-year statute of limitations. I respectfully dissent on the date of accrual
issue. Petitioner's claim is based entirely on an alleged noncompliant notice. The
law makes clear that a debtor is entitled to bring an action prior to disposition of
the collateral. Because the law provides for the commencement of an action prior
to disposition, I do not agree with the majority of this Court that the action accrues
only upon the disposition of the collateral. I adopt the well-reasoned court of
appeals' majority opinion holding that the cause of action accrued when the
allegedly deficient notice of sale was received. Accordingly, I would affirm the
court of appeals as modified.
