C. Defenses

• Library: Elements of Civil Causes of Action (SCBar) (2021 Ed.)

C. Defenses

The plaintiff's conduct may be a defense to a fraud action if that conduct either constitutes a waiver,⁴¹ provides a ground for an assertion of estoppel or bars by laches from claiming fraud.⁴² Neither the parol evidence rule nor a merger or general non-reliance clause in a contract prevents a party from proceeding on the tort theory of fraud.⁴³ A release may be a defense.⁴⁴ Contractually required arbitration may also be a defense to fraud.⁴⁵ Additionally, statutes of limitation may bar the claim.⁴⁶ Statutory bars also exist where a governmental defendant is involved.⁴⁷ The South Carolina Tort Claims Act⁴⁸ waives the immunity of the State, its agencies, political subdivisions, and governmental entities from liability in tort. It contains, however, many limitations on liability and damages which may preclude or restrict a plaintiff's cause of action.⁴⁹ The Act is the exclusive and sole remedy for any tort committed by an employee of a governmental entity while acting within the scope of his or her official duty and must be liberally construed in favor of limiting the liability of the governmental entity.⁵⁰ A limitation specifically applicable to an action for fraud is that governmental entities⁵¹ are not liable for a loss resulting from "employee conduct . . . which constitutes actual fraud . . .".⁵²

Common law causes of action, including misrepresentation may be preempted by the federal Employment Retirement Income Security Act (ERISA) of 1974.⁵³

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Notes:

^[41] See, e.g., Bull v. Metropolitan Life Ins. Co., 195 S.C. 536, 12 S.E.2d 24 (1941); Halsey v. Minnesota-South Carolina Land & Timber Co., 174 S.C. 97, 177 S.E. 29 (1934). While the right to sue for fraud may be waived by conduct inconsistent with the intention to sue, there can be no waiver where the plaintiff did not know of the fraud and had no means of discovering it. Bull v. Metropolitan Life Insurance Co., 195 S.C. 536, 12 S.E.2d 24 (1941) (in order to constitute waiver, defrauded party must act with full knowledge of rights and material facts constituting fraud).

^[42] See, e.g., Grayson v. Fidelity Life Ins. Co. of Philadelphia, 114 S.C. 130, 103 S.E. 477 (1920); Anthony v. Padmar, Inc., 320 S.C. 436, 465 S.E.2d 745 (Ct. App. 1995); 465 S.E.2d 464 (Ct. App. 1989), overruled on other grounds, Olson v. Faculty House of Carolina, Inc., 354 S.C. 161, 580 S.E.2d 440 (S.C. 2003).

^[43] Slack v. James, 364 S.C. 609, 614 S.E.2d 636 (S.C. 2005). See generally Rogers, Slack v. James: Can...