46 Waste

• Library: Elements of Civil Causes of Action (SCBar) (2015 Ed.)

46 Waste

A. Definition

Waste is an ancient common law action.¹ It is recognized by South Carolina courts,² and mentioned in several South Carolina statutes.³ It is a tort action,⁴ though it is also shaped by contract law and is often treated as a topic in the law of property. ⁵ In Wingard v. Lee⁶ the court described waste saying:

At common law, waste is any permanent injury to lands, houses, gardens, trees, or other corporeal hereditaments done or permitted by the tenant of an estate less than a fee to the prejudice of him in reversion or remainder... Waste may be committed by acts or omissions which tend to the lasting destruction, deterioration, or material alteration of the freehold and the improvements thereto or which diminish the permanent value of the inheritance. Whether particular acts or omissions constitute waste depends on matters of fact, including: the nature, purpose, and duration of the tenancy; the character of the property; whether the acts complained of are related to the use and enjoyment of the property; whether the use is reasonable in the circumstances; and whether the acts complained of are reasonably necessary to effectuate such use.⁷

Similarly, the Federal District Court for South Carolina said that waste is defined as the destruction, misuse, alteration or neglect of premises by one lawfully in possession of it to the prejudice of the estate or interest in the premises of another and that failure of a tenant⁸ or mortgagor to exercise the ordinary care of a prudent person for the preservation and protection of the estate is permissive waste.⁹ As suggested by the federal court, waste is generally considered to be of two¹⁰ types: permissive and voluntary, although it does not appear that South Carolina courts have explicitly made this distinction. Permissive waste is said to be "merely permitted" and "...consists in the neglect or omission to do what will prevent injury to the estate or freehold, as, for example, to suffer a house to become decayed for want of proper repair,"¹¹ or even failure to pay taxes or mortgage interest.¹² It is measured by a rule of prudence. Voluntary waste is "active or positive, and consists in some act of destruction or devastation."¹³ In both commercial¹⁴ and residential tenancies the common law of waste may be effectively superceded by either modern statutory or contractual obligations. The South Carolina Residential Landlord and Tenant Act, for example, provides a tenant must:

... not deliberately or negligently destroy, deface, damage, impair, or remove any part of the premises or knowingly permit any person to do so who is on the premises with the tenant's permission or who is allowed access to the premises by the tenant ...¹⁵

A landlord may, under the Act, enforce those obligations or a violation of a residential rental agreement, and obtain actual damages, injunctive relief, judgment, or eviction.¹⁶ If, therefore, a lease proscribes waste, rather than bring a common law action for waste, the landlord may have an action pursuant to the Act or a breach of contract action for violation of a lease covenant.

B. Elements

It does not appear that any South Carolina state court has specified the elements of an action for waste. The Federal District Court for South Carolina has said that three elements must be proved to establish the cause of action: "an act constituting waste; done by one legally in possession of the property; and, prejudicial to the estate or interest of another in the property."¹⁷ That is very close to the elements employed by North Carolina courts and, since the Wingard court specifically cited a leading North Carolina case for the definition of waste, North Carolina decisions may be of value to give meaning to the elements.

C. Elements Defined

1. An Act Constituting Waste

Acts of waste are generally those causing permanent injury to lands, houses, gardens, trees, or other corporeal hereditaments.¹⁸ Traditionally, waste concerned cutting timber,¹⁹removing buildings²⁰ or fixtures,²¹ or allowing buildings to go into disrepair.²² It may also involve removal of soil or manure or alteration or defacement of improvements,²³ failure to make repairs that prevent greater permanent harm,²⁴ failure to pay taxes,²⁵ or failure to pay mortgage interest.²⁶ The Federal District Court for South Carolina decided that cancellation of a lease assigned as security for payment of a debt constitutes waste.²⁷

2. The Defendant Is Legally in Possession of the Property

The general rule is that the defendant must be in lawful possession to be subject to an action for waste.²⁸ At common law waste was an injury done or permitted by a tenant of an estate less than fee.²⁹ A party without any possessory estate, could not commit waste.³⁰The Federal Fourth Circuit implicitly recognized that principle in a case in which it said a landlord being sued by its mortgagee was subject to a continuing responsibility to keep a building watertight when it gave a tenant the right to possess the premises through a lease. The court concluded that "[t]o the limited extent of that responsibility, at least, [the landlord] qualified, vis-a-vis the mortgagee, as a person in possession."³¹ While a party without a possessory estate cannot commit waste, a party holding a possessory estate may be subject to an action for waste if he or she permits another who has no possessory estate, or even any interest in the property, to commit waste.³²

3. Prejudice to the Estate or Interest of Another in the Property

The third element is also described as injury to the estate or diminution in its value,³³in short: injury or damages. Therefore, making improvements to property, in and of itself, will ordinarily not constitute waste.³⁴ South Carolina appears to accept this proposition. In Lewis v. Virginia-Carolina Chemical Co. ,³⁵ the defendant had a lease allowing it to mine phosphate and to cut timber in connection with the mining operation. The defendant used timber to construct buildings on the property, a use not authorized by the lease. The South Carolina Supreme Court said:

These facts come near to establishing a case of meliorating waste exempting from damages, as the injury to the inheritance by the unauthorized destruction of timber is more than offset by the saving of timber in other respects, and by the use of the timber cut on the premises in its permanent improvement. But the buildings were to become the property of plaintiffs, without regard to where the lumber came from, and the use of the timber was expressly restricted to the purposes named; so that it was a technical violation of plaintiffs' right to cut and use the timber for an unauthorized purpose, and plaintiffs are entitled to compensation.³⁶ (emphasis supplied)

The court's use of the phrase "near to establishing a case of meliorating waste" clearly suggests that under the proper facts it might find improvements made offset any damage.³⁷This, however, was not the case in Lewis. The court concluded the "technical violation" merited "the lightest measure of damages which the law will allow" since the plaintiffs already had the property, "taken and improved by defendant in the buildings into which it was converted" and it was "not suggested that the land was otherwise injured than by the mere taking of the timber."³⁸

A second aspect of the third element is that the plaintiff must have an "estate or interest" in the property at issue. That interest is commonly a remainder in a life estate,³⁹or fee ownership of leased property.⁴⁰ South Carolina also appears to allow one co-tenant to bring an action for waste against another co-tenant.⁴¹ A more problematic interest, but one that South Carolina apparently will permit to be the subject of an action for waste, is a specific lien — usually a mortgage — against the real estate.⁴² The problem, of course, is that a mortgagee has only a lien interest. South Carolina does allow mortgagees to recover for waste; however, the combined recovery for waste and through foreclosure may not exceed the amount of the mortgage indebtedness.⁴³ Additionally, foreclosure and sale is not a condition precedent to an action for waste.⁴⁴

D. Defenses

"Consent"⁴⁵ has been accepted by the South Carolina Court of Appeals as a defense to waste. The court said that if acts that might otherwise constitute waste are expressly or impliedly authorized by an instrument creating a tenancy, a "tenancy without impeachment of waste" is created and tenant is not liable for waste, as long as he or she does not act unreasonably, maliciously, or unconscionably to destroy the estate.⁴⁶

Accord and satisfaction⁴⁷ has also been broached as a viable defense, while purchase of a life estate by a remainderman/plaintiff⁴⁸ or good faith⁴⁹ are said not to be defenses. A federal court rejected the defense of failure to mitigate damages,⁵⁰ along with failure to settle, knowledge of the property defect, and absence of a bond.⁵¹ On appeal of the case, the Fourth Circuit confronted the question of whether the action was barred by a provision in a mortgage stating that the mortgagor would not be liable to the mortgagee "on the indebtedness secured hereby or upon any of the other terms, covenants or conditions of this instrument." The court said that since waste is a tort, that provision in the agreement was inapplicable.⁵²

Res judicata may bar a claim. For example a plaintiff sought partition in the probate court. The allegations in his pleadings set forth the elements of waste, although the tort was not delineated as a separate cause of action. The plaintiff then specifically requested the probate court not rule on the waste claim. When he later brought an action for waste in the circuit court, the South Carolina Supreme Court said that action was barred by res judicata.⁵³

Where the plaintiff has a remainder interest, standing has served as a limited defense as it is held that until a remainder interest vests, the plaintiff cannot recover damages...