C. Special Damages Defined

• Library: South Carolina Damages (SCBar) (2009 Ed.)

C. Special Damages Defined

1. The Todd/Vaught Definition

As noted above, civil conspiracy requires there be "special damages."⁶ This is a "unique feature" of the tort of civil conspiracy.⁷

The two cases most often cited regarding civil conspiracy's special damages requirement are Todd v. South Carolina Farm Bureau Mutual Insurance Co.⁸ and Vaught.⁹In the 1981 Todd decision, the South Carolina Supreme Court held that a demurrer should have been sustained on a civil conspiracy cause of action because the damages sought therein were identical to those sought in other causes of action.¹⁰"Todd seeks damages in his first four causes of action for the same acts incorporated by the fifth [civil conspiracy] cause. He is therefore precluded from seeking damages for the same acts yet again. As such, the fifth cause fails to state an action."¹¹ Similarly, in Vaught v. Waites,¹²the court of appeals, following Todd, held: "The damages sought in the conspiracy cause of action are the same as those sought in the breach of contract cause of action. Because no special damages are alleged aside from the breach of contract damages, we hold the conspiracy action is barred."¹³

Each of these cases, Todd and Vaught, held that one could not even bring a civil conspiracy cause of action unless the damages sought differed from those sought in other causes of action.

2. Recent Developments

Since the previous edition went into press, the South Carolina Supreme Court has suggested that the special damages requirement may not exist. Then, in dicta in another case, the court appeared to reinstate the requirement. In 2004, in Peoples Federal Savings & Loan Ass'n of South Carolina v. Resources Planning Corp.,¹⁴the court upheld a civil conspiracy award where the damages were similar to the damages sought on another claim.¹⁵It did so because there had been a directed verdict in favor of the defendant on that other claim.¹⁶ The court suggested that Todd might be limited to the principle of election of remedies.¹⁷

Two years later, in 2006, in Pye v. Estate of Fox,¹⁸the court seemed to revert to the classic Todd/Vaught analysis. Citing Vaught, the court declared: "Because the quiddity of a civil conspiracy claim is the damage resulting to the plaintiff, the damages alleged must go beyond the damages alleged in other causes of action."¹⁹

Meanwhile, the federal courts, in a series of unpublished decisions, have convoluted the issue further.²⁰ (That they are unpublished is of minimal relevance, for reasons explained in the footnote.²¹) Central is the Fourth Circuit's 2005 decision in James v. Pratt & Whitney²²The court below had followed the rule stated by Vaught and Todd²³It had held that since no damages were alleged in the civil conspiracy claim that were not alleged in other claims, the civil conspiracy claim must be dismissed.²⁴ The Fourth Circuit held this to be reversible error.²⁵

Following neither Todd nor Vaught, nor Peoples Federal, the Fourth Circuit announced an altogether different rule for South Carolina law. Based largely on the meaning of the term "special damages" in other contexts, the Fourth Circuit announced, "special damages" meant damages that are the proximate, but not the necessary, result of the wrong; they must be pled to put the opposing party on notice of what the plaintiff is seeking.²⁶ Federal decisions since then are in conflict.²⁷ Notably, the only relevant recent published federal authority, In Re Derivium Capital²⁸dismissed the civil conspiracy claim because it merely realleged damages pled elsewhere, thus following the classic Todd/Vaught analysis.²⁹

3. Summary

The central question for one bringing or defending a civil conspiracy claim is whether the plaintiff has sufficiently alleged "special damages" from the conspiracy.

At least three arguable meanings of "special damages" exist under the case law. One is the classic Todd/Vaught definition, reaffirmed in dicta in 2006: to bring such a claim, one must...