South Carolina Homeowners Pursue ‘Stigma Damages’

South Carolina Homeowners Pursue ‘Stigma Damages’

 A lawsuit brought by several Myrtle Beach property owners against AVX Corp. that had been dismissed by a lower court was reinstated and allowed to proceed following a recent South Carolina Supreme Court decision. The lawsuit was brought by property owners who claimed their property values had decreased and they could not obtain bank loans because of ground pollution attributable to AVX Corp.’s Myrtle Beach plant that utilized trichloroethylene (TCE). In reinstating the lawsuit and allowing it to proceed, the South Carolina Supreme Court stated that the property owner’s suit raised the “novel question” of whether South Carolina will recognize “stigma damages.

Details About the Suit Against AVX Corp

AVX’s Myrtle Beach plant and headquarters utilized TCE as an industrial degreaser during the 1970s and 1980s. Although AVX knew that TCE was seeping into the groundwater and causing pollution to the land underneath its plant as well as the adjacent neighborhood, AVX did not admit this until 1995. The AVX plant in Myrtle Beach was closed and subsequently demolished and the company moved its headquarters to Greenville. In 2014, AVX agreed to pay the owners of 42 pieces of Myrtle Beach property a total of $1.2 million.

Property owners whose property is near to the polluted neighborhood are bringing the present lawsuit to court. These property owners claim that the pollution of the nearby neighborhood has negatively impacted their property values. South Carolina has not yet determined whether the “stigma damages” being sought are permitted under South Carolina law.

What are “Stigma Damages” and Will They Be Recognized in South Carolina?

 Like the term implies, “stigma damages” can be defined as monetary compensation designed to compensate property owners whose own property has not been physically damaged or altered but who have nevertheless experienced harm in that:

  • The value of their property has decreased
  • Their property is seen as “less desirable” by potential buyers
  • Banks and lenders are not willing to allow loans to proceed (or will not lend as much money) where the subject land is used as collateral

The South Carolina Supreme Court stated in its ruling that additional facts need to be produced at trial that showed whether a stigma actually did exist or whether cleanup efforts conducted by AVX had dissipated the stigma. This suggests that if the property owners can show an actual decrease in their property value that is attributable to the nearby pollution, the court will have little hesitancy in recognizing a right to recover stigma damages.

How a South Carolina Real Estate Lawyer Can Help You

If your real estate property has experienced a sudden decrease in value or you find it suddenly more difficult to either sell your home or obtain a loan secured by your property, it pays to consult with the South Carolina real estate lawyers of the Klok Law Firm LLC. The carelessness or negligence of another person may be responsible and (if the Myrtle Beach property owners’ suit is successful) stigma damages may be available. Contact us for a free consultation about your real estate issue by calling (843) 216-8860.