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South Carolina Supreme Court Upholds Mortgage’s Jury Trial Waiver Language

Posted By USFN, Friday, August 1, 2014
Updated: Tuesday, October 13, 2015

August 1, 2014


by Ron Scott & Reggie Corley
Scott Law Firm, P.A. – USFN Member (South Carolina)

As a judicial foreclosure state, mortgage foreclosure actions in South Carolina are matters in equity and neither the mortgagor nor the mortgagee is entitled, as a matter of right, to a trial by jury. However, counterclaims — including those raised in foreclosure actions — may at times be entitled to a jury trial.

In the South Carolina Supreme Court’s February 26, 2014, decision in Wachovia Bank v. Blackburn, the court reaffirmed a framework for determining which counterclaims by mortgagors are entitled to a jury trial.

The court held as follows: “To the extent any of [the mortgagors’] counterclaims were equitable in nature, they did not have a right to a jury trial on those claims. To the extent any of [the mortgagors’] counterclaims were legal — regardless of whether the claims were permissive or compulsory — [the mortgagors] waived their right to a jury trial, either through the waiver provisions or because they raised their permissive claims in an equitable action. [The mortgagors] may only avoid this result if the contractual jury trial waivers executed in connection with the loan documents are invalid and unenforceable.”

Specifically, in the present case, the Supreme Court upheld the jury trial waiver language in the loan documents as being enforceable because the loan documents were knowingly and voluntarily executed by the mortgagors. The court held that if the mortgagors waive their right to a jury trial within the loan documents, no jury trial can be compelled for counterclaims that are legal and compulsory.

© Copyright 2014 USFN and Scott Law Firm, P.A. All rights reserved.
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