Dorchester Judge Under Fire on Foreclosure Case

March 15, 2010

Investigative Reports

Print Friendly, PDF & Email

The NerveIf you ask Sherry Peterson-Davidson, she’ll tell you that Patrick Watts doesn’t deserve to wear a black robe and hold a gavel.

The Summerville woman told The Nerve last week she hopes Dorchester County’s state legislative delegation doesn’t renominate the longtime master-in-equity judge, and that Gov. Mark Sanford will decline to reappoint him even if the delegation recommends otherwise.

Peterson-Davidson is far more than a sideline observer in the matter: The state’s highest court in December ruled that Watts violated her constitutional rights by allowing his secretary to conduct a foreclosure hearing involving her home – without any testimony. Watts later signed an order authorizing the foreclosure, though he wasn’t present at the hearing.

Master-in-equity judges, who are appointed for six years, have the authority of circuit court judges but typically hear non-jury civil cases. Foreclosures usually make up the largest part of their caseloads.

“Whether Judge Watts stands alone in the guilt here, or whether it is some kind of ongoing conspiracy … he has the final say-so in these (foreclosure ) matters, and having the final say-so, he should be held ultimately responsible for the wrongdoing,” Peterson-Davidson told The Nerve.

And in an ironic twist, the Peterson-Davidson case also raises questions about whether the S.C. Supreme Court is too cozy with at least one powerful lawmaker who has supported Watts.

Watts declined comment when contacted last week by The Nerve.

Watts has been Dorchester’s part-time master-in-equity since 1994; he also is a private practice attorney in Summerville. His annual salary as a part-time judge is $67,821, according to county records.

Contacted by The Nerve, state Sen. Mike Rose, one of Dorchester County’s seven legislative delegation members, said he opposes Watts’ renomination, though the delegation has not yet taken a formal vote.

Under state law, the governor can appoint a master-in-equity only from candidates nominated by the delegation.

Candidates appointed by the governor have to be confirmed by the S.C. Legislature. South Carolina and Virginia are the only states in which its legislature elects judges.

“Any judge should know that a court hearing is held by a judge, not a secretary,” said Rose, an attorney. “It’s hard to believe this happened only once.”

Besides the Peterson-Davidson matter, Rose said he has questions about how Watts handles foreclosure sales and attorney fees in foreclosure cases.

In the Peterson-Davidson case, Watts ruled that she and her husband, Ed Davidson, owed more than $200,000, including $4,500 to the lender’s attorney, according to the judge’s written order obtained by The Nerve.

Rose said he supports Frederick Newton, a Dorchester County magistrate and Summerville attorney, to replace Watts, contending that Newton is a “better candidate.”

The Nerve last week sent written questions about Watts’ renomination to the other six members of the Dorchester County delegation – House Speaker Bobby Harrell; Reps. Annette Young, Jenny Horne and Patsy Knight; and Sens. Larry Grooms and John Matthews – but didn’t receive any responses.

In 2004, Grooms, Matthews, Harrell and Young signed a delegation letter supporting Watts’ nomination then, according to the Governor’s Office.

Peterson-Davidson said she was informed that Sanford’s office began investigating Watts after the S.C. Supreme Court ruling in December.

Contacted last week by The Nerve, Sanford spokesman Ben Fox declined to discuss specifics, saying in a written response that it would be “more appropriate for you to contact Judge Watts regarding any allegations you have received specifically about him.”

Fox noted, though: “It is not unusual for our office – in the vetting process leading up to any number of the hundreds of state and local appointments like this per year – to look into concerns that are triggered by background checks or concerns shared with us by members of the community or legislators. That said, we are reviewing facts relevant to our appointment process for Masters-in-Equity.”

Absentee Judge

Peterson-Davidson told The Nerve she suspected something wasn’t right on March 6, 2008, when she showed up 10 minutes early to her foreclosure hearing in the old St. George courthouse, and discovered a dark and empty courtroom.

She said when she went to Watts’ office, his secretary, Gayle Evans, greeted her, escorted her to a tiny room nearby and proceeded to conduct the hearing along with the lender’s attorney, Martha Phillips of Fleming & Whitt of Columbia. Neither Evans nor Phillips appeared concerned that Watts wasn’t present, she said.

Peterson-Davidson said she was allowed to speak only after she asked if she could do so. She said she informed Evans and Phillips she wanted to save her home, and that she and her husband, who couldn’t make the hearing, planned on filing for bankruptcy to put the foreclosure on hold. She said Evans told her that Watts would review the documents from the hearing and make a final ruling.

Evans declined comment when contacted last week by The Nerve. A woman who identified herself as the office manager at Fleming & Whitt told The Nerve that Phillips was no longer with the firm, and she didn’t have any contact number for her.

Peterson-Davidson said she and her husband, both of whom are nurses, fell behind on their monthly mortgage payments after she got laid off from her job at Summerville Medical Center. She said they tried to sell their home, which they purchased new in 2004, but couldn’t because it had numerous construction problems.

Their approximate $1,000 monthly mortgage payment doubled after their fixed interest rate switched to a much higher variable rate after two years, Peterson-Davidson said, adding she and her husband were misled at the closing.

Court records reviewed by The Nerve show that Watts signed an order – dated the day of the March 2008 hearing but filed with the clerk of court 12 days later – authorizing the foreclosure. His order noted that the Davidsons were “liable for aforesaid debt including interest at the rate of 11.375% per annum.”

The total listed debt was $212,034.16, including $4,500 owed to the Fleming and Whitt law firm. Watts in his order described the law firm’s share as a “reasonable fee,” though he didn’t give specifics on how the fee was calculated.

The order said that “testimony was taken,” though the S.C. Supreme Court in its ruling described it as “phantom testimony” because no court reporter was present.

The Davidsons appealed Watts’ order, contending their rights were violated with the no-judge hearing. After their appeal was filed, Watts issued another written order in May 2008 admitting he wasn’t present at the March 2008 hearing “due to unavoidable circumstances,” records show.

Rights Violated

The Supreme Court on Dec. 21 unanimously ruled that the Davidsons deserved a new hearing.

“The judge’s absence from the hearing deprived the Davidsons of the opportunity to be heard and, thus violated their constitutional guaranteed due process,” Justice John Kittredge wrote for the majority.

The court said Watts’ absence was a “structural defect” as opposed to a “harmless error.” Still, though the justices found the actions of attorney Phillips – who wasn’t named in the ruling but was identified in other court papers – at the March 2008 hearing to be “troubling,” they had less harsh words for Watts.

“While it may be difficult to understand how an order was issued from a hearing that never happened, we put the matter into context by recognizing the enormous caseloads handled by our state’s excellent Masters, especially with respect to mortgage foreclosures,” the justices said.

Rep. Young, who recommended Watts’ nomination in 2004, has a special connection to the S.C. Judicial Department as chair of a House Ways and Means subcommittee that considers the annual budget of the state court system. She also serves as first vice-chair of the full committee.

Peterson-Davidson told The Nerve she plans to file a formal ethics complaint against Watts with the state Commission on Judicial Conduct. She and her husband filed a lawsuit last month in Dorchester County against Phillips, Phillips’ former law partner D. Randolph Whitt, and Watts’ secretary, Evans.

Whitt did not return a message left by The Nerve last week at his office.

The Davidsons’ suit, which seeks more than $300,000 in damages, contends they were “wrongfully denied a fair due process hearing,” and that the defendant attorneys were “involved in a civil conspiracy with the Office of the Master-in-Equity for Dorchester County.”

Peterson-Davidson told The Nerve she was advised by her attorney, Orin Briggs of Lexington, that Watts couldn’t be sued under state law. On top of that, the Supreme Court denied her request that her pending foreclosure case be transferred to a different judge.

“While the execution of (the) proposed order was unfortunate, we discern nothing in the record warranting mandatory disqualification of this Master,” the justices said in their December ruling.

Counters Peterson-Davidson: “He did wrong. How blatant can it be that this judge should be disqualified from this case?”

Reach Brundrett at (803) 779-5022, ext. 106, or rick@scpolicycouncil.com