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The parties acknowledge each to the other that thereexists a certain Lawsuit between Cabana LimitedPartnership vs. Greyhound Real Estate FinanceCompany, et al., and that in consideration for theadvancement of the funds above, the Fifty Thousandand no/100 ($50,000.00) Dollars, Osprey, Inc. is buyingan interest in that said Lawsuit. If said Lawsuit issettled or tried with a verdict in excess of FiftyThousand and no/100 Dollars ($50,000.00) Dollars,Osprey, Inc. will receive the sum of the amount of theverdict up to a maximum of One Hundred FiftyThousand and no/100 ($150,000.00) Dollars and theNote will be considered satisfied and paid in full. If theLawsuit is never settled or if tried and the outcome isnot in favor of Cabana Limited Partnership in anamount of One Hundred Fifty Thousand and no/100($150,000.00) Dollars or more, then the Debtor willremain obligated for the Note [in the] amount of theSettlement or verdict but in no event less than FiftyThousand and no/100 ($50,000.00) Dollars.
In related loan documents, Defendants Bluewater and Cabanasigned a promissory note in the amount of $50,000, bearing an annual interestrate of 15 percent, to Plaintiff Osprey; Defendant Reiner personally guaranteedthe loan; Reiner assigned all his right and interest in the first $150,000 of grossproceeds from the federal lawsuit to Osprey; and Bluewater assigned its interestin certain timeshare notes and mortgages to Osprey to serve as collateral for theloan. In January 1994, the parties settled the federal case and enteredinto a sealed settlement agreement. Plaintiffs sought repayment of the loanupon learning of the settlement. Defendants asserted they were prohibited fromrevealing the terms of the settlement and refused to repay the loan. The federalcourt ultimately granted Plaintiffs’ request to disclose the settlement agreement,and Plaintiffs discovered that Defendants had received $650,000. Tompkins &McMaster was paid $200,000 for attorney’s fees and the remainder was placedin escrow. The settlement agreement required Greyhound, the defendant in thefederal lawsuit, to pay $650,000 directly to Tompkins & McMaster ascompensation for legal services in five related cases, including Cabana’s. Theagreement prohibited any payment to Cabana, and required Tompkins &McMaster to hold $450,000 in escrow pending the resolution of tax levies filedagainst Cabana by the Internal Revenue Service. Tompkins & McMaster v.United States, No. 95-1882,1996 WL 389483,1996 U.S. App. LEXIS 17118 (4thCir. July 12, 1996) (unpublished opinion). Tompkins & McMaster filed a federal lawsuit to clarify its rights tothe $450,000. The firm argued that no tax levy attached to the proceeds becauseCabana received nothing from the settlement and had no right to legal feesreceived by the firm. The Fourth Circuit Court of Appeals, in affirming thedistrict court’s dismissal of the case, rejected Tompkins & McMaster’s argument.Although the money was not paid directly to Cabana, it was paid to the firm onCabana’s behalf and for its benefit. Thus, the $650,000 represented Cabana’sproceeds from the federal litigation. Tompkins & McMaster, supra. Defendantsassert the IRS matter has since been resolved in favor of Greyhound andTompkins & McMaster, and against the IRS. Plaintiffs filed suit in state court to enforce the loan agreement.Defendants moved to dismiss the complaint under Rule 12(b)(6), SCRCP,because the agreement was champertous on its face and consequentlyunenforceable. The circuit judge granted Defendants’ motion to dismiss aschampertous the causes of action for breach of contract, breach of contract ofassignment, and breach of contract accompanied by a fraudulent act.[FOOTNOTE 1] Plaintiffs appealed. Reviewing the matter as a motion for summaryjudgment pursuant to Rule 12(c), SCRCP, the Court of Appeals affirmed thecircuit judge’s ruling that South Carolina recognizes the doctrine of champerty.However, the Court of Appeals reversed the judge’s ruling that the loanagreement is champertous as a matter of law. The Court of Appeals limited thedoctrine of champerty, then remanded the case for further inquiry into the factsto determine whether the agreement is enforceable. Osprey, 333 S. C. 323,S.E.2d 275. ISSUE Does South Carolina recognize the common lawdoctrine of champerty and, if so, does it remain a viabledefense to the enforcement of the loan agreement inthis case? STANDARD OF REVIEW This case raises a novel question of law. We are free to decide aquestion of law with no particular deference to the lower court. See S.C. Const.art. V, ��5 and 9; S.C. Code Ann. �� 14-3-320 and -330 (1976 & Supp.1999); S.C.Code Ann. � 14-8-200 (Supp. 1999) (granting Supreme Court and Court ofAppeals the jurisdiction to correct errors of law in both law and equity actions);I’On v. Town of Mt. Pleasant, Op. No. 25048 (S.C. Sup. Ct. filed Jan. 17, 2000)(Shearouse Adv. Sh. No. 2 at 1). DISCUSSION Plaintiffs contend the Court of Appeals erred in holding that SouthCarolina recognizes the doctrine of champerty. They assert that champerty isnot and should not be recognized because it is rooted in feudal England. It is anoutdated concept no longer needed in twenty-first century America, Plaintiffsargue. They urge the Court to refuse to recognize champerty and enforce theentire agreement as it was written. Defendants assert the Court has long recognized champerty, shouldcontinue to recognize it, and should apply it in this case to nullify the entire loanagreement – including the $50,000 note and guarantee – because it ischampertous as a matter of law. We agree with the Court of Appeals that this Court previously hasrecognized the common law doctrine of champerty. Osprey, 333 S.C. at 329-30,509 S.E.2d at 277 (citing S.C. Code Ann. � 14-1-50 (1977), which provides that”[a]ll, and every part, of the common law of England, where it is not altered bythe Code or inconsistent with the Constitution or laws of this State, is herebycontinued in full force and effect in the same manner as before the adoption ofthis section”). Champerty is defined as a bargain by a person with a plaintiff or adefendant for a portion of the matter involved in a suit in the event of asuccessful termination of the action, which the person undertakes to maintainor carry on at his own expense. State v. Chitty, 17 S.C. Law (1 Bail.) 379, 400(1830); 14 C.J.S. Champerty and Maintenance �2 (1991); 14 Am.Jur.2dChamperty and Maintenance � 3 (1964). A champertor is one who purchases aninterest in the outcome of a case in which he has no interest otherwise. Achampertous agreement is unlawful and void where the rule of champerty isrecognized, and the tainted agreement is unenforceable. 14 C.J.S. Champertyand Maintenance �17; 14 Am.Jur.2d Champerty and Maintenance � 7. Barratry (or barretry) is the offense of frequently exciting andstirring up quarrels and suits between other individuals. Chitty, supra; 14C.J.S. Champerty and Maintenance � 2; Black’s Law Dictionary 150 (1990).Champerty and barratry have been described as forms of maintenance, whichis defined as “an officious intermeddling in a suit that in no way belongs to one,by maintaining or assisting either party. with money or otherwise, to prosecuteor defend [the suit].” 14 C.J.S. Champerty and Maintenance � 2(b); 14Am.Jur.2d Champerty and Maintenance � 2. As explained by the United States Supreme Court, “[p]ut simply,maintenance is helping another prosecute a suit; champerty is maintaining asuit in return for a financial interest in the outcome; and barratry is acontinuing practice of maintenance or champerty.” In re Primus, 436 U.S. 412,424 n.15, 98 S.Ct. 1893, 1900 n.15, 56 L.Ed.2d 417, 429 n.15 (1978). “The lawsagainst champerty, maintenance, and barratry are aimed at the prevention ofmultitudinous and useless lawsuits and at the prevention of speculation inlawsuits.” 14 C.J.S. Champerty and Maintenance � 2. The origins of the doctrine of champerty are found in medievalEngland.[FOOTNOTE 2] Claims and rights in those days were not freely assignable. UnderEnglish common law, the public policy originally was so strongly opposed tochamperty and maintenance that assignments of a cause of action, so as to givethe assignee any right to bring suit in his own name, generally were forbidden.Noland v. Law, 170 S.C. 345, 353, 170 S.E. 439, 442 (1933). “[T]he offense ofmaintenance was a broad one . . . and was so abhorred that it formed one basisfor the prohibition against assigning choses in action” until the nineteenthcentury. Son v. Margolius, 709 A.2d 112, 120 (Md. 1998) (quoting 4 WilliamBlackstone, Commentaries on the Laws of England). To overcome such impediments, wealthy people obtained interestsin legal claims, agreeing to pay the litigant’s expenses in exchange for a shareof the results if successful. Such claims often involved title to land, which meantthat a person with capital could grow richer by becoming a joint owner of alanded estate. Champertors, both the wealthy and those desiring to becomewealthy, financed the claims of the others, often the poor and the dispossessed,against people upon whom the champertors sought to inflict financial or politicalinjury. Feudal magnates had numerous retainers, including professionalmaintainers, who brought suits financed by the magnate. Those maintainerstook all necessary steps to win, including the employment of bullies to preventan opponent from appearing in court at a critical moment. Champerty was a”means by which powerful men aggrandized their estates and the backgroundwas unquestionably that of private war.” Max Radin, Maintenance byChamperty, 24 Cal. L. Rev. 48, 58-64 (1935); see also Percy H. Winfield, TheHistory of Maintenance and Champerty, 35 Law Quarterly R. 50, 57-68 (1919);R.D. Cox, Champerty As We Know It, 13 Memphis St. U. L. R. 139, 143-60(1983). Neither secular nor clerical medieval courts were able to prevent orpolice such agreements. Collusion among the landed gentry, sheriffs, judicialofficials, and the king’s ministers to obtain money and land through themaintenance of a stranger’s lawsuit was rampant in medieval England. Radin,supra; Winfield, supra; Cox, supra. King after king tried to eradicate thepractice, but never wholly succeeded because those who were called upon toenforce the law often were the worst offenders. Winfield, supra, at 65. Legal historians view champerty as a final “flaring up” of the feudalera, a last-ditch effort of feudal lords to combat the limits and framework of themonarchy. It embodied a resistance of the moneyed class to capitalistic forcesthat had begun to take root across Europe in the eleventh and twelfth centuries.Radin, supra, at 64-66. Efforts to prevent champerty and maintenance were grounded inseveral concerns: the king’s desire to prevent litigation involving his owninterests or those of his supporters; clerical opposition to litigation generally,especially in secular courts; a general dislike of usury, or the practice of loaningmoney at interest; and the belief that litigation was, in itself, an undesirable anddistasteful-affair, regardless of the merits of a lawsuit. Radin, supra, 60-67. With that background, this Court’s strong language and unequivocalcondemnation of champerty evident in State v. Chitty, supra, is understandable.In Chitty, the defendant magistrate, an attorney, was found guilty of the crimeof barratry. The magistrate constantly urged people to swear out warrants andcross-warrants in order to generate additional fees for himself. In affirming theconviction, the majority stated that some authorities suggest
that if a man lay out money, in behalf of another insuits at law to recover a just right, he is not a barretor,and that he may do this in respect of the poverty of theparty. Some subsequent writers also, losing sight of thereason of the rule, have laid it down, generally, that itwas not barretry to spend money in promoting the suitof another to recover a just right. But . . . in the casereferred to, it is expressly laid down, that if one lendmoney to promote and stir up suits, he is a barretor. . . The busybody, the deceiver, the vile knave, orunthrift, who excites others to litigation, with anintention to vex, and oppress, and by this means extortmoney, is . . . an offender against public justice. Maintenance, it seems, is a species of barretry;and champerty, and conspiracy belong to the same classof offences, and yet it never entered into the mind ofany man, that he who unlawfully maintained a suit,bargained to divide the field, or conspired with others,was less a maintainer, champertor, or conspirator,because the cause was just [and not rooted in a selfishor oppressive motive] . . . . The temple erected andconsecrated to Justice is not, however, to be pollutedwith impunity, by those who would prostitute the rulesregulating its police to base and unworthy purposes… The pursuit of right, whether public or private,can never be an offence; where justice alone is the endin view; but every perversion of the machinery of thelaw to other purposes, by coupling it with improperobjects, is reprehensible. Hence if one lay out money inthe prosecution of a suit to recover a close, of which hispoor neighbor has been deprived, and without which hemust lose it, he is no champertor, because, right,humanity, and justice would approve it: but if he do itupon a stipulation, that he shall receive one half of thefield, if it be recovered, he is, according to the legaldefinition of this offence, a champertor.
Chitty,17 S.C., Law (1 Bail.) at 399-401. The Chitty court, then, plainly believedchamperty was a perverse practice that should be eradicated as a matter ofpublic policy, regardless of whether the champertor’s motive is to see justicedone or merely financial gain for himself. We have found only two cases other than Chitty which reveal muchabout this Court’s past view of champerty. In Cooke v. Pool, 25 S.C. 593 (1886),the Court rejected a champerty argument. The Court appeared much lessdisturbed by signs of champerty than the Chitty court had been fifty-six yearsearlier. In Cooke, a plaintiff who obtained a default judgment assigned it toattorney Thompson Cooke for $100. Thompson Cooke, who was not aninterested party in the litigation that resulted in the default judgment, thenassigned the judgment to his brother, Henry Cooke, in payment of a debt. Thedefendants asserted Henry could not enforce the judgment because the originalassignment of the judgment to Thompson was champertous. The Cooke court disagreed. The Court concluded that, althoughThompson probably could not have sought to enforce the judgment because thetransfer to him was champertous and in violation of a statute, Thompson’sassignment to brother Henry was not void for champerty. The Court found thatthe record supported the lower court’s finding that Henry was a bonafide holderof a regular and valid assignment who had no notice of the tainted title. [FOOTNOTE 3] This Court appeared similarly unfazed by medieval notions ofchamperty when it found an English statute enacted by Henry VIII, which wasintended to prevent champertous conveyances, inapplicable in South Carolina.Poyas v. Wilkins, 46 S.C.L. (12 Rich.) 420, 428 (1860) (a conveyance of land byone out of possession is not void for champerty). In this case, the Court of Appeals remanded the matter for furtherinquiry into whether “Plaintiffs, in lending the Defendants money for litigationexpenses, engaged in officious intermeddling with the intention to stir up strifeor otherwise unnecessarily prolong a lawsuit.” Osprey, 333 S.C. at 330-31, 509S.E.2d at 279. The Court of Appeals relied on three cases from other jurisdictions.In two of those, it appears the court rejected the champerty argument becausethe alleged champertor was not really a champertor at all under a modern viewof the assignability of rights, but actually had a legitimate interest in the action.See Temeron, Inc. v. Ferraro Energy Corp., 861 P.2d 319, 325-26 (Okla Ct. App.1993) (alleged champertor had the right, under a consulting contract it signedwith gas supplier to review supplier’s records, to bring suit on supplier’s behalfto recover underpayments and retain percentage of proceeds; court reversedsummary judgment for defendant on grounds of champerty, recognizing thealleged champertor had a legitimate interest in the matter); Giambattista v.Nat’l Bank of Commerce of Seattle, 586 P.2d 1180, 1186-88 (Wash. Ct. App.1978) (alleged champertor was a money broker who agreed to pay litigationexpenses for its client depositors whose certified checks were not handledproperly by a bank; court reversed grant of summary judgment for defendant ongrounds of champerty, recognizing the alleged champertor had a legitimateinterest in the matter); see also cases cited in footnote 3. A third case cited by the Court of Appeals is quite similar to thepresent case. In Kraft v. Mason, 668 So.2d 679 (Fla. Dist. Ct. App. 1996), asister loaned her brother $100,000 to pay litigation expenses in an ongoingantitrust lawsuit. The loan agreement called for the sister to receive interest onthe loan, plus a declining percentage of any settlement or judgment obtained.After the case settled for more than $5 million, the brother reneged on the dealbecause of an unrelated family dispute with his sister. He refused to pay some$355,000 he owed her under the agreement. Id. at 681-83. The Kraft court rejected the brother’s champerty defense. The courtreasoned that times have changed since the medieval era when champerty wasstrongly disfavored. The court held that officious intermeddling was a necessaryelement of proving a champerty defense, and found no such intermeddling. Thetrial court correctly had rejected the champerty argument because the sister hadsimply loaned her brother money to continue an ongoing case. Accordingly, under Kraft and our Court of Appeals’ opinion in thiscase, an agreement is void for champerty when the champertor is a “stranger”to the lawsuit with no legitimate interest in it; the champertor provides moneyto litigate the suit; the champertor is entitled by the agreement to share in theproceeds of the suit; and the champertor is an officious intermeddler whointended to stir up strife or unnecessarily prolong the suit. Officiousintermeddling occurs when the champertor offers unnecessary and unwantedadvice or services, especially in a highhanded or overbearing way. Osprey, 333S.C. at 330-31, 509 S.E.2d at 279. Some observers have asserted the doctrine of champerty ought to belimited in such a manner, and urge courts to avoid linking champerty today tothe champerty of medieval times. “Under all circumstances, it would be well toomit all attempts to connect [champerty] with the medieval offenses which hada rationale of their own, and deal with it as a modern phenomenon to be judgedby modern standards and in relation to existing conditions.” Radin, supra, at 66.Instead of voiding agreements that appear champertous as a matter of law,courts should scrutinize the agreement and the surrounding circumstances todetermine whether to enforce the agreement. Such scrutiny “will substitutejudgment by reality for judgment by category.” Id. at 78. Courts following this view typically reason that “[i]t sometimes maybe useful and convenient, when one has a just demand which he is not able frompoverty to enforce, that a more fortunate friend should assist him, and wait forhis compensation until the suit is determined, and be paid out of the fruits of it.”Metropolitan Life Ins. Co. v. Fuller, 23 A. 193, 196 (Conn. 1891); see alsoRichardson v. Rowland, 40 Conn. 565 (Conn. 1873) (applying law of New Yorkto reject champerty defense and allow plaintiff who helped defendant resolve amortgage dispute recover half of proceeds of settlement; opinion lists casesillustrating states were evenly split in nineteenth century on validity ofchampertous agreements); Ari Dobner, Litigation for Sale, 144 U. Pa. L. Rev.1529,1543-55 (1996) (discussing modern view of champerty in various states andexplaining that, although states take different approaches, most seek to limitevils traditionally associated with champerty – frivolous lawsuits or speculationin groundless suits). The Massachusetts Supreme Judicial Court recently eschewedmedieval concepts of champerty, choosing instead to rely on other well-developedprinciples of law to prevent evils traditionally associated with champertousagreements. In Saladini v. Righellis, 687 N.E.2d 1224 (Mass. 1997), Saladiniadvanced litigation expenses to Righellis to enable him to pursue his claims ina real estate dispute. In return, Saladini would receive half of any net recovery,after payment of attorney’s fees. Saladini, who had no other interest in the realestate dispute, paid some $19,000 in expenses on Righellis’ behalf. Righellissettled the suit for $130,000, but did not tell Saladini. When Saladini learnedof the settlement, she brought an action to enforce the agreement. Righellisasserted the agreement was champertous and thus unenforceable. The Saladini court disagreed, and abolished the doctrines ofchamperty, barratry, and maintenance after reviewing their “checkered history”in Massachusetts and elsewhere. The court explained that causes of action andcontract rights are freely assignable today, unlike in medieval times. Moreimportantly, “the decline of champerty, maintenance, and barratry as offencesis symptomatic of a fundamental change in society’s view of litigation – from asocial ill, which, like other disputes and quarrels, should be minimized to asocially useful way to resolve disputes.” Id. at 1226 (internal quotes omitted).The court no longer was persuaded
that the champerty doctrine is needed to protectagainst the evils once feared: speculation in lawsuits,the bringing of frivolous lawsuits, or financialoverreaching by a party of superior bargaining position .. . . To the extent that we continue to have the concernsthat the doctrine of champerty was thought to address,we conclude that it is better to do so directly, ratherthan attempting to mold an ancient doctrine to moderncircumstances. As Justice Holmes . . . said a centuryago: “It is revolting to have no better reason for a ruleof law than that so it was laid down in the time ofHenry IV. It is still more revolting if the grounds uponwhich it was laid down have vanished long since, andthe rule simply persists from blind imitation of thepast.”
Saladini, 687 N.E.2d at 1226-27. (quoting O.W. Holmes, The Path of the Law, 10Harv. L. Rev. 457, 469 (Jan. 8, 1897)). We find persuasive the reasoning of our own Court of Appeals andthe Saladini and Kraft courts. However, instead of limiting the doctrine ofchamperty as the Court of Appeals did, we abolish champerty as a defense. Weare convinced that other well-developed principles of law can more effectivelyaccomplish the goals of preventing speculation in groundless lawsuits and thefiling of frivolous suits than dated notions of champerty. For example, a lawyer is prohibited from prosecuting a frivolouslawsuit and may face various sanctions if he or she files frivolous pleadings. SeeRule 3.1 of the Rules of Professional Conduct (RPC) contained in Rule 407,SCACR (“A lawyer shall not bring or defend a proceeding, or assert or controvertan issue therein, unless there is a basis for doing so that is not frivolous, whichincludes a good faith argument for an extension, modification or reversal ofexisting law.”); Rule 11, SCRCP (allowing sanctions against attorney if there isno good ground to support a pleading or if it is interposed for delay). A litigantforced to endure a frivolous lawsuit has a statutory remedy in the SouthCarolina Frivolous Civil Proceedings Sanctions Act. S.C. Code Ann. �� 15-36-10to -50 (Supp. 1999). Furthermore, the doctrines of unconscionability, duress, and goodfaith establish standards of fair dealing between opposing parties. E.g., U.S. forUse and Benefit of Williams Elec. Co. v. Metric Constructors, Inc., 325 S.C. 129,480 S.E.2d 447 (1997) (” [e]very contract contains implied obligation of good faithand fair dealing”); Fanning v. Fritz’s Pontiac-Cadillac-Buick, Inc., 322 S.C. 399,472 S.E.2d 242 (1996) (discussing unconscionability). In addition, theLegislature has defined barratry, i.e., the promotion or exciting of groundlessjudicial proceedings, as a misdemeanor offense. S.C. Code Ann. �� 16-17-10 &16-1-100(B) (1985 & Supp. 1999) (defining offense of barratry); S.C. Code Ann.�16-17-50 (1985) (statutory barratry provisions are cumulative and not intendedto repeal any common law provisions regarding barratry). Our abolition of champerty as a defense does not mean that all suchagreements are enforceable as written. When an agreement to finance a lawsuitis challenged, the court must “consider whether the fees charged are excessiveor whether any recovery by a prevailing party is vitiated because of someimpermissible overreaching by the financier.” Saladini, 687 N.E:2d at 1227. Thecourt must be guided by an analysis of what is fair and reasonable under thecircumstances. The court may examine (1) whether the respective bargainingposition of the parties at the time the agreement was made was relatively equal,(2) whether both parties were aware of the terms and consequences of theagreement, (3) whether the borrowing party may have been unable to pursue thelawsuit at all without the financier’s help, (4) whether the financier would retaina disproportionate share of the recovery, and (5) whether the financier engagedin officious intermeddling. See Saladini, 687 N.E.2d at 1227; Osprey, 333 S.C.at 330-31, 509 S.E.2d at 279. A financier becomes an officious intermeddlerwhen he or she offers unwanted advice or otherwise attempts to control thelitigation for the purpose of stirring up strife or continuing a frivolous lawsuit.See Smith v. Hartsell, 63 S.E. -172, 174 (N.C. 1908) (stating it has come to begenerally accepted that an agreement will not be condemned as champertousunless’-the interference is clearly officious and for the purpose of stirring upstrife and continuing litigation); Osprey, supra; Kraft, supra. After analyzingthese factors and any others the court deems relevant, the court may enforce,modify, or set aside the financing agreement. We note two peripheral matters that we do not address today. First,the case before us involves a financial arrangement between non-lawyers.Various ethical constraints closely control and in many instances prohibitbusiness transactions between a lawyer and his or her client. See Rule 1.8, RPC.In particular, a lawyer may not acquire a proprietary interest in the subjectmatter of litigation the lawyer is conducting for a client, except that the lawyermay acquire a lien to secure the lawyer’s fees or expenses, and the lawyer maycontract with a client for a reasonable contingent fee in a civil case. Rule 1.80),RPC. We do not address whether a lawyer may act as a financier in a caseinvolving a litigant who is not the lawyer’s client. See Susan Lorde Martin,Syndicated Lawsuits: Illegal Champerty or New Business Opportunity?, 30 Am.Bus. L.J. 485, 488 (1992) (listing statutes in several states that prohibitattorneys or others connected with the judicial process from engaging inmaintenance and champerty).[FOOTNOTE 4] Second, our decision today neither addresses norauthorizes the syndication of lawsuits, a practice in which a litigant sells sharesin his lawsuit to investors. See Martin, supra; Dobner, supra (discussingsyndication of lawsuits). CONCLUSION We abolish champerty as a defense because we believe it no longeris required to prevent the evils traditionally associated with the doctrine as itdeveloped in medieval times. Accordingly, we affirm, with the modifications wehave outlined, the Court of Appeals’ decision to reverse the grant of summaryjudgment to Defendants. We remand this case to circuit court for furtherproceedings consistent with our opinion. Because the issue may arise again upon remand, we rejectDefendants’ argument that Plaintiffs have no claim to the $650,000 paid toDefendants’ attorneys by Greyhound to settle the federal litigation. Althoughthe money was not paid directly to Cabana, it was paid to the Tompkins &McMaster firm on Cabana’s behalf and for its benefit. See Tompkins &McMaster, supra. We have considered Defendants’ remaining arguments andfind them unpersuasive. AFFIRMED AS MODIFIED. FINNEY, C.J., TOAL, MOORE, and BURNETT, JJ., concur. :::FOOTNOTES::: FN1 The circuit judge allowed Plaintiffs’ causes of action for breach ofcontract on the note, breach of contract of guarantee, strict foreclosure, breachof fiduciary duty by the attorneys, and fraud to proceed because they were notbarred as champertous. Those actions are still pending below. FN2 One of the first statutes prohibiting champerty was enacted by EdwardI in the thirteenth century. It provided that
[n]o officer of the King by themselves, nor by other,shall maintain pleas, suits, or matters hanging in theKing’s courts, for land, tenements, or other things, forto have part or profit thereof by covenant made betweenthem, and he that doth, shall be punished at the King’spleasure.
Percy H. Winfield, The History of Maintenance and Champerty, 35 LawQuarterly R. 50, 59 (1919). Legal historians have traced the roots of champerty back to the Greek andRoman civilizations when the predecessors of modern lawyers were required todemonstrate a “personal connection” to a litigant before speaking on his behalf.Since ancient times, political allies have joined together to harass their enemieswith vexatious litigation. Those who did so were known as “sycophants” inancient Greece, “calumniators” in ancient Rome, and “maintainers” in medievalEngland. Max Radin, Maintenance by Champerty, 24 Cal. L. R. 48, 50-53(1935); Elliott Associates. L.P. v. Banco de la Nacion, 194 F.3d 363, 372 (2d Cir.1999) (” [c] ommentators have traced the doctrine of champerty, and its doctrinalnear-cousins of maintenance and barratry, back to Greek and Roman law,through the English law of the Middle Ages, and into the statutory or commonlaw of many of the states”). FN3The parties discuss several other South Carolina cases. None areparticularly helpful or relevant because they involved agreements that were notchampertous. In each one, the party defending the agreement as notchampertous had a legitimate interest in the litigation. See McSwain v. Davis,96 S.C. 155, 80 S.E. 87 (1913) (finding that document giving McSwain the right,at McSwain’s expense, to take legal action necessary to execute an optioncontract given by previous landowner was not champertous, apparently becauseMcSwain had an obvious interest in the litigation); Ex parte Hiers, 67 S.C. 108,45 S.E. 146 (1903) (concluding an assignment by the husband of a lawsuit heinitially brought to his wife was not champertous because they were “stillregarded as one in law”; furthermore, the money which the husband had soughtto recover was the wife’s inheritance); Fraser & Dill v. Charleston, 13 S.C. 533,545 (1880) (concluding devisees’ assignment to City of Charleston of rightsrelating to stock issued by the city, after the stock was fraudulently conveyed bythe testator’s personal representative, was not a champertous agreement; cityas a proper assignee had right to take legal action to protect the thing assigned). Champerty frequently is raised when it really is not an issue at all becausean agreement involves a party who, in the modern view, has a valid interest ina lawsuit. See e.g., In re Perrysburg Marketplace Co., 208 B.R. 148 (Bankr. N.D.Ohio 1997) (prosecution of secured claim against Chapter 11 debtor-mortgagorby mortgagee, which had purchased debtor’s loan from Resolution TrustCorporation, did not constitute champerty); Schwartz v. Eliades, 939 P.2d 1034(Nev. 1997) (agreement between two cab company owners to share litigationexpenses and any proceeds in defamation suit, where other owners assignedtheir interest in the suit to the two, was not champertous because neither ownerwas a stranger to the lawsuit); Rienhardt v. Kelly, 917 P.2d 963 (N.M. Ct. App.1996) (agreement by testator’s son with residuary beneficiary of testator’s will,in which son agreed to pay for beneficiary’s litigation costs in suit to disputevalidity of agreement between decedent and another for purchase of ranch fornominal amount of money, was not champertous given that son, as heir oftestator, had property interest in lawsuit). As the Massachusetts Supreme Judicial Court has explained, “[i]f a partyhas an interest independent of and prior to the allegedly champertousarrangement, or even the possibility of an interest, in the subject litigated, theagreement to carry on the litigation at his own expense in consideration ofhaving part of the recovery is not champertous and illegal.” Berman v. Linnane,679 N.E.2d 174, 177 (Mass. 1997). FN4 Lawyers who accept cases on a contingency fee basis may appear to bechampertors under the traditional meaning of the term. Such lawyers arestrangers to the lawsuit who may advance litigation expenses and their servicesin exchange for a percentage of a successful result. See Radin, supra, at 66-6 7;Dobner, supra, at 1532. Contingency fees generally are viewed favorably in theUnited States, unlike other countries. American courts do not view such feeagreements as champertous. See 14 C.J.S. Champerty and Maintenance � 11;14 Am.Jur.2d Champerty and Maintenance � 4; W. Kent Davis, TheInternational View of Attorney Fees in Civil Suits: Why Is the United States the”Odd Man Out” in How it Pays its Lawyers?, 16 Ariz. J. Int’1 & Comp. L. 361(1999) (discussing pros and cons of contingency fees and explaining how they areviewed as champertous in some nations); Robert H. Roether, The Forest for theTrees: Judicial Activism in the Tort Marketplace, 78 Mich. B. J.706 (1999)(explaining positive aspects of contingency fees).
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