Background
The South Carolina Court of Appeals affirmed a $154,178.33 default judgment against SC OPCO, LLC, the company that acquired and operated a Ridgeland skilled-nursing facility. The unpublished decision reinforces the sharp distinction between setting aside an entry of default under Rule 55(c), SCRCP, and obtaining relief from a final default judgment under Rule 60(b). A sophisticated business that consciously ignores properly served pleadings cannot recast its decision as a good-faith factual mistake simply because it believes it has no contractual liability.
Bullard & Son, doing business as Lowcountry Medical Linens, had a sixty-month service agreement with the nursing facility’s former operator. The contract required payment within thirty days, imposed an 18% annual late charge, shifted collection-related legal fees, and required an early-termination payment equal to half the weekly rental rate for the remaining term. After SC OPCO purchased the facility in November 2021, an employee ended the linen service. Lowcountry later sued over roughly fifty unpaid invoices, serving SC OPCO’s registered agent with the summons and complaint.
SC OPCO received the pleadings but did not answer. It maintained that it believed no response was necessary because the former owner signed the contract and correspondence used the facility’s former name. It also declined to appear after receiving notice of the damages hearing. A special referee entered judgment that included unpaid invoices, unreturned products, late charges, early-termination damages, costs, and $38,419.45 in attorney’s fees. Only after counsel learned judgment had been entered did SC OPCO seek relief from default and a new trial.
The Court’s Holding
The appellate panel found no abuse of discretion in denying Rule 60(b) relief. Once judgment has been entered, Rule 60(b)’s particularized grounds replace Rule 55(c)’s more forgiving “good cause” standard. Although Rule 60(b)(1) can remedy a qualifying mistake, inadvertence, surprise, or excusable neglect, it generally does not relieve a party from a mistake of law. SC OPCO knew it had been named and served. Its belief that it did not need to participate because another entity executed the agreement concerned the legal effect of the claim, not an unknown fact.
The record also undermined the company’s characterization of its conduct as excusable. SC OPCO received the complaint, multiple earlier invoices, and notice of the damages hearing, yet repeatedly chose not to respond. The special referee described that course as a conscious decision by a sophisticated defendant. Because SC OPCO could not establish a qualifying Rule 60(b) ground, the Court of Appeals did not need to decide whether it had a meritorious defense to successor or contractual liability.
The panel also upheld the amount of judgment. Default admits liability, though the plaintiff must still prove damages by a preponderance of the evidence. That distinction prevented SC OPCO from using the damages phase to relitigate whether it was liable on the service agreement. The special referee calculated unpaid balances, late charges, and early-termination damages from the agreement’s express terms. The contractual promise to pay collection-related legal fees authorized an award, and the court found the one-third contingency amount reasonable under the factors governing fee awards, including counsel’s experience, the duration of the matter, the work performed, and the result achieved.
Key Takeaways
- A party seeking relief after entry of a default judgment must satisfy Rule 60(b), a materially stricter standard than Rule 55(c)’s good-cause test for setting aside an entry of default.
- Deliberately ignoring served pleadings because the defendant believes the claim is legally unfounded is ordinarily a mistake of law, not the kind of good-faith factual mistake that supports Rule 60(b)(1) relief.
- Default concedes liability but not damages; the plaintiff must prove the amount, while the defaulting defendant generally cannot reopen defenses to liability during that inquiry.
- A contractual fee provision can support a contingency-based award when the trial court evaluates the governing reasonableness factors and the record supports the amount.
Why It Matters
South Carolina businesses and their counsel should treat service as a litigation deadline, even when a complaint appears to target the wrong entity, rely on a predecessor’s contract, or present a strong defense. Those issues belong in a timely answer or motion. A unilateral decision that the lawsuit does not require a response can transform an arguable merits defense into a final judgment that is much harder to undo.
For plaintiffs, the opinion is also a useful roadmap for proving damages after default. Liability may be settled, but invoices, contract formulas, late-fee provisions, costs, and the basis for attorney’s fees still require evidence. The decision is unpublished and nonprecedential under Rule 268(d)(2), SCACR, but its application of Rules 55 and 60 offers practical guidance for default practice in South Carolina courts.